Mortgage Rates Continue to Climb, Closing in on 5% Mark

Borrowing costs on home loans continue to increase, with mortgage rates rising sharply for the past five weeks in a row. New data released Thursday show that the average rate for a 30-year mortgage jumped 22 basis points over the last seven days.
[IMAGE] ""Freddie Mac reports"":http://www.freddiemac.com/pmms/release.html?week=50&year=2010&display=release that rates for a 30-year fixed mortgage averaged 4.83 percent (0.7 point) for the week ending December 16, 2010. That's up from last week's average of 4.61 percent. Last year at this time, the 30-year rate was 4.94 percent.

The GSE's weekly rate survey is based on data gathered from about 125 lenders across the country, and it showed increases across the board.

The 15-year fixed-rate mortgage this week averaged 4.17 percent (0.7 point) in Freddie's study. Last week, it was 3.96 percent, and a year ago at this time, it was 4.38 percent.

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Adjustable-rate mortgages (ARMs) also climbed higher. Freddie says the 5-year ARM averaged 3.77 percent (0.7 point) this week, up from 3.60 percent. Rates on 1-year ARMs came in at 3.35 percent (0.7 point), compared to 3.27 percent the previous week.

A separate ""study released by Bankrate"":http://www.bankrate.com/finance/mortgages/mortgage-rates-hit-5-percent.aspx?ic_id=tsFS1 Thursday, which derives its figures from data provided by the top 10 banks and thrifts in the top 10 U.S. markets, shows that 30-year rates among its covered lenders already hit the 5.00 percent (0.4 point) mark this week. That’s up from a 4.89 percent average reported by Bankrate last week.

It’s the first time since May that the 30-year rate has hit the 5 percent threshold in Bankrate’s study. As recently as November 3, mortgage rates were at a record low of 4.42 percent, according to the tracking firm’s analysis.

The average 15-year fixed mortgage increased to 4.37 percent (0.38 point), and the larger jumbo 30-year fixed rate rose to 5.58 percent in Bankrate’s study.

Adjustable rate mortgages were also higher, with the average 5-year ARM jumping to 3.95 percent and the average 7-year ARM climbing to 4.36 percent.

Bankrate ""surveys a panel of mortgage experts"":http://www.bankrate.com/finance/mortgages/mortgage-rate-trend-index8-160063-1.aspx each week to gauge which way they think rates are headed over the next seven days. Nearly three-quarters of the panelists, 73 percent, expect mortgage rates to increase and only 7 percent predict rates to decline. The other 20 percent forecast that rates will remain more or less unchanged over the next week.