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Mortgage Rates: The Journey Upward Continues

Upbeat economic news propelled mortgage rates even higher this week, ""Freddie Mac"":http://www.freddiemac.com/index.html and ""Bankrate"":http://www.bankrate.com/ reported Thursday.


According to Freddie Mac's Primary Mortgage Market Survey, 30-year fixed-rate mortgages averaged 5.21 percent with an average 0.6 point for the week ending April 8, 2010, up from 5.08 percent last week and notably higher than last year at this time when rates averaged 4.87 percent. Freddie Mac said this is the highest average for 30-year fixed-rate mortgages since the week ending August 13, 2009 when rates averaged 5.29 percent.

The story was the same for 15-year fixed-rate mortgages. This week, rates averaged 4.52 percent with an average 0.6 point, up from last week's average of 4.39 percent but slightly lower than this same week in 2009 when 15-year fixed-rate mortgages averaged 4.54 percent. This is the


highest average since the week ending December 31, 2009 when rates averaged 4.54 percent, Freddie Mac said.

""Once again, mortgage rates followed bond yields higher amid a positive March employment report,"" said Frank Nothaft, Freddie Mac VP and chief economist.

Bankrate reported the same upward trend, saying positive news on both the manufacturing and service sectors of the economy, coupled with a return to job growth, lifted yields on government debt as investors clamored for better returns. As a result, mortgage rates, which are closely related to yields on long-term Treasury securities, increased. Bankrate also said looming government debt auctions were a contributing factor in this week's jump in rates.

According to the company's weekly national survey, 30-year fixed-rate mortgages averaged 5.35 percent with an average 0.47 point, up from 5.23 percent last week. In addition, Bankrate said 15-year fixed-rate mortgages averaged 4.69 percent with an average 0.37 point, a jump from last week's average of 4.53 percent.

Complementing Bankrate's survey is its weekly Rate Trend Index, in which mortgage experts predict which way rates are headed over the next week. Panelists were unable to come to a clear consensus for the upcoming week, though. While 38 percent predicted continued growth over the next week, the remaining respondents were evenly split. A decline was forecast by 31 percent of panelists, and an equal 31 percent said mortgage rates will remain more or less unchanged in the coming week.

About Author: Brittany Dunn


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