30 Year Mortgage Rises, Ending 2009 Above 2008 Levels

The average rate on a 30-year fixed mortgage rose to 5.14% this week according to data from Freddie Mac. That's higher than the 5.10% rate at this time last year. This is consistent with data from the BestCashCow rate tables which show average 30-year mortgage rates moving from 5.193% to 5.211%.

I checked the Massachusetts mortgage rate tables and found one 30-year fixed rate mortgage at 5% with no points. The closing costs were $1,995 which seemed a bit steep for me (these rates are changing constantly so if you click and don't see the rate it must have changed). The table shows that including points there are still some APRs below 5%. Check mortgage rates in your area.

The 15-year FRM this week averaged 4.54 percent with an average 0.7 point, up from last week when it averaged 4.45 percent. A year ago at this time, the 15-year FRM averaged 4.83 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.44 percent this week, with an average 0.6 point, up from last week when it averaged 4.40 percent. A year ago, the 5-year ARM averaged 5.57 percent.

The 1-year Treasury-indexed ARM averaged 4.33 percent this week with an average 0.6 point, down from last week when it averaged 4.38 percent. At this time last year, the 1-year ARM averaged 4.85 percent.

As the chart below shows, there is now a divergence between short term mortgage rates, which have remained low, and longer-term rates, which have begun to spike up. This trend is consistent with a widening yield curve as longer-term maturities begin to respond to inflation fears and the Fed beginning to end its quantitative easing program. That is, the Fed is slowing the programs it ran to bring down lonter-term rates. At the same time, the Fed is keeping its short term benchmark, the Fed Funds rate at 0, keeping short term savings and lending rates stuck to the floor.

These rates are still low by historical standards but they're moving up and will probably continue to do so over the next six months.

The rates above are just averages. To find the best mortgage rate in your area, visit the BestCashCow mortgage rates tables.