Mortgage Rates Rise; 30-Year Crests 5% By Joan E. Solsman Wall Street Journal 02-26-2010

Mortgage Rates Rise; 30-Year Crests 5%
By Joan E. Solsman
The Wall Street Journal
February 26, 2010

Home-mortgage rates mostly rose this week, with the average rate on 30-year fixed-rate mortgages jumping back above 5%, according to Freddie Mac's weekly survey.

Freddie's chief economist, Frank Nothaft, said rates for 30-year fixed mortgages followed long-term bond yields higher as data about the housing market's recovery remained choppy. Mortgage rates tend to follow the yields.

Recovery in the U.S. housing market has been fragile. Demand for new and used homes, after strengthening in earlier months, has dropped in recent months because of cold weather and continuing joblessness. New-home sales unexpectedly hit a record low in January, the Commerce Department said Wednesday. Data on existing-home sales are due Friday.

The 30-year fixed-rate mortgage averaged 5.05% for the week ended Thursday, up from last week's 4.93% average but down from 5.07% a year ago. Rates on 15-year fixed-rate mortgages were 4.4%, up from 4.33% last week but down from 4.68% a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.16%, up from last week's 4.12% but down from 5.06% a year earlier. One-year Treasury-indexed ARMs were 4.15%, down from 4.23% last week and 4.81% a year earlier.

To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point and the adjustable-rate mortgages required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.