Thursday, February 25, 2010

Mortgage Rates on 30-Year U.S. Loans Rise to 5.05

According to, US mortgage rates climbed for the first time in nearly a month; this increased the cost of borrowing and caused home sales to be the lowest levels on record. The 30-year fixed rate rose to 5.05%, up from 4.93%.

“This is potentially a preview of the data we’ll have to watch over the next few months,” Donald Rissmiller, Chief Economist at Strategas Research Partners in New York, said in a telephone interview. “Big changes are on the horizon that are going to be critical for the economy.”

Mortgage rates may rise further when a Federal Reserve program to purchase as much as $1.25 trillion in mortgage-backed securities ends next month. The program is credited with helping reduce mortgage rates, which fell to a record low of 4.71 percent in December.

Bond purchases from Fannie Mae, Freddie Mac and Ginnie Mae, which buy home loans from lenders and package them into securities, brought down yields and allowed lenders to reduce mortgage rates while still selling the bonds at a profit.

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