Mortgage rates rise toward 5 per cent
National average mortgage rates are on the rise in the United States as jobless claims are improving and the economy appears to be improving. The national average 30-year fixed rate Thursday (December 9) morning is 4.91 per cent according to Bankrate.com, compared with an average mortgage rate of 4.66 per cent on Thursday last week.
Not all that long ago, home buyers and real estate investors found rates on 30 year loans at just above 4 per cent. However, recent improvements in the job and housing markets, combined with increased demand for mortgage-backed securities have driven rates higher.
The Labor Department reported jobless claims early Thursday morning and the news was positive. New unemployment claims were at their second-lowest level of 2010 with a reported decline of 17,000 claims.
The seasonally adjusted number of new claims was 421,000 for the week ending December 4th, which was slightly below forecasts of 425,000 claims. Four-week average claims of 427,500 are the lowest number since August 2009.
Despite higher costs of borrowing and improving labor conditions, some top real estate analysts still believe that lots of discount prices in the market make it is a good time to invest in real estate.
Zillow, a real estate information site, reported Thursday that home prices in the US fell by a remarkable $1.7 trillion from 2009 to 2010. This comes after a drop of around one trillion dollars from 2008 to 2009, and makes for some heavily discounted homes still available in the real estate market.
If you can afford the higher payments, a 15-year fixed loan still offers an excellent low-interest opportunity. National average rates are 4.25 per cent Thursday, relative to a 4.03 per cent rate one week ago.
Another possible catalyst for rising mortgage rates is the recent agreement of President Obama to extend Bush-era tax cuts for the wealthy (over $250,000 annual income) as well as the middle class.
Since the announcement, investors have been more aggressive in higher risk investments and may be buying discounted bonds and mortgage securities as a long-term investment.
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