Rates Keep Rising!

Mortgage rates rose this week, topping 5% for the first time since April, 2010.Freddie Mac reported that the 30 year fixed loan averaged 5.05% this week, a full percentage point higher than the average rate in November. Economists predict that rates will continue to rise this year, to about 5.5%. Common wisdom holds that every 1% rise in rates effectively raises home costs for buyers by 10%.

In other housing related news, the White House published proposed reforms for Fannie Mae and Freddie Mac, which could greatly impact costs and loan options available for buyers. Our area has benefited from the temporary conforming loan limit of $535,900, which is set to expire in September of this year. Should Congress not extend the limits, buyers seeking loans over $417,000 will need 20% down and will pay higher jumbo loan rates.

Here are our weekend rates for purchase loans above $150,000 for buyers with 740+ credit scores and 30 day rate locks:

30 year fixed ($150,000-$417,000): 5.0%
30 year fixed ($417,000-$535,900): 5.125%
FHA 30 year fixed: 4.75%
FHA 5/1 ARM:3.625%
Jumbo 30 year fixed:5.375%

Please note rates do vary by occupancy, credit score, rate lock period, and loan-to-value.

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