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Mortgage Rates Edge Up, Breaking 12-Week Descent to Record-Lows

Long-term mortgage rates inched up this week, breaking a buyer-friendly trend of successively falling to record-lows week after week for the past three months. The question now is, will the threat of rising interest rates push prospective homebuyers to take a leap?
[IMAGE] ""Freddie Mac reported"":http://www.freddiemac.com/pmms/release.html?week=36&year=2010 Thursday that 30-year fixed-rate mortgages (FRM) averaged 4.35 percent (0.7 point) for the week ending September 9, 2010, up from last week's average of 4.32 percent.

Fifteen-year FRMs, on the other hand, came in at the record low of 3.83 percent (0.6 point) this week in Freddie Mac's study, unchanged from last week.

Frank Nothaft, VP and chief economist at Freddie Mac called the latest rate report ""somewhat sanguine,"" as mortgage rates moved in line with bond yields, which rose abruptly at the end of last week, and had a ""mixed effect on mortgage rates this week, with the 30-year fixed rate nudged up but the 15-year fixed rate unchanged,"" according to Nothaft.


The GSE also reported that rates for 5-year adjustable-rate mortgages (ARMs) moved higher this week, to 3.56 percent (0.6 point). That’s up from 3.54 percent the week prior. One-year ARMs, though, dropped slightly to 3.46 percent (0.7 point).

A separate study by ""Bankrate"":http://www.bankrate.com/finance/mortgages/mortgage-rates-bounce-back.aspx, which is based on data provided by the top 10 banks and thrifts in the top 10 U.S. markets, showed a similar rise in mortgage rates, but its findings stretched across the board.

Bankrate says the average conforming 30-year fixed mortgage rate climbed to 4.58 percent (0.37 percent) this week, up from 4.53 percent last week.

In Bankrate’s study, the average 15-year fixed mortgage inched up to 4.06 percent, and the larger jumbo 30-year fixed rate rose to 5.23 percent. Adjustable rate mortgages were both up this week, with the average 5-year ARM jumping to 3.91 percent and the average 7-year ARM moving to 4.17 percent.

Bankrate said in its report, “Mortgage rates moved higher following a series of more upbeat economic readings prior to Labor Day. The August jobs report wasn't stellar, but it wasn't as dour as expected, and this was a catalyst for investors to move into riskier assets. In doing so, investors sold safe-haven Treasury securities, to which mortgage rates are closely related.”

The company says the path of mortgage rates will be determined largely by investors' sentiment about whether the economy is getting better or worse, and will continue to yo-yo up and down amid conflicting economic readings.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

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