Mortgage Rates on Their Way Up!

As expected, mortgage rates have begun to rise, particularly in light of the recent move by the Fed.  According to Freddie Mac’s weekly survey of conforming mortgages released on Thursday, mortgage rates climbed this week with the average rate on the 30-year fixed-rate mortgage at its highest since the end of June.  Rates on the 30-year mortgage averaged 4.61% for the week ending Dec. 9, up from 4.46% last week. It’s the fourth week in a row that the mortgage rate rose; it averaged 4.81% a year ago.

General improvement in the economy over the last couple of weeks has also had an influence on the rise in rates, said Keith Gumbinger, vice president of HSH Associates, in an email. HSH is a publisher of consumer loan information.

Plus, after the election, political uncertainty has passed. With the latest agreement in Washington, some of the tax-rate uncertainty is removed from the equation, he said.

“With some greater certainty comes greater clarity and confidence about the durability of the recovery, and investors seem to be shifting at least some holdings out of ‘safe haven’ spots in favor of other opportunities,” Gumbinger said.

He also points out that while mortgage rates are on the rise, it’s important to keep the increase in perspective.

“Rates are still well below this time last year, when people were basically climbing over one another to get to them” if they could qualify, he said. “Rates are still outstanding, just no longer unbelievably low,” he said.

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