Rates on 30-Year Mortgages are Climbing

[Feb 14, 2008.]

The giant mortgage company known as Freddie Mac is reporting that rates on 30-year mortgages have increased to their highest level in 5 weeks. The rates now average 5.72%, which is up from 5.67% the previous week. Still, some observers are heartened by the fact that the rates remain below the 6% level.

Freddie Mac officials note that banks have been enforcing stricter credit standards, meaning that it is more difficult to obtain a loan than it used to be.

Meanwhile, rates on 15-year mortgages, which are often used for refinancing, inched up to 5.25%, up from 5.15% the previous week. Interestingly enough, rates on 5-year, adjustable-rate mortgages dropped to 5.19%, down from 5.21% the week before. However, rates on 1-year adjustable-rate mortgages stood steady at 5.03%, unchanged from the previous week’s rates.

Just last year, rates on 30-year mortgages were 6.30% and rates on 15-year mortgages stood at 6.03%. At that time, 5-year adjustable-rate mortgages stood at 6.01% and 1-year adjustable-rate mortgages were at 5.52%.
The crisis within the housing market and the credit industry threaten to plunge the U.S. into a recession.

However, the Federal Reserve Board has promised to do everything it can to prevent a recession from occurring. The Fed has consistently cut key interest rates, and more interest rate reductions are on the way.

Experts do not expect the housing market to turn around until the middle of next year. Some forecasters say that the market will not recover until well into 2010. The housing slump represents the worst housing situation in the U.S. in nearly 2 decades. As a result, the housing crisis has become a key issue on the Presidential campaign trail. In fact, it may come to pass that whoever voters think can solve the housing crisis will win the White House.

Julie Ann Amos
Febraury 14th 2008

Recent News

• Credit Card Companies Hold Consumers Responsible
  Some public officials have been saying that credit card companies lure consumers into a debt trap that is difficult to escape. They say that the credit card issuers are being irresponsible in the manner in which they peddle credit.


• Fannie Mae and Freddie Mac Offer Assistance During Housing Crisis
  The White House recently agreed to temporarily extend the size of mortgages Fannie Mae and Freddie Mac can buy, from $417,000 to almost twice that amount. [10th February 2008]


• Treasury Department Plan May Offer Limited Aid
  There are growing indications that the homeowner bailout plan offered by the U.S. Treasury Department may have a limited effect. [7th February 2008]


• Credit Card Debt Can Be Bad for Your Financial Health
  Many Americans carry thousands of dollars in credit card debt. Indeed, some turn to credit cards to finance their lifestyles when they are struggling with student loans, adjustable rate home mortgages, and other debts.


• Minorities Targeted for Subprime Loans
  The National Community Reinvestment Coalition recently studied mortgage information from 100 metropolitan areas in the U.S. Some observers say the results have been quite shocking. [3rd February 2008]


• Bank of America Posts Disappointing Income
  Corporate titan Bank of America is apparently falling on tough times. [1st February 2008]