Mortgage Rates are on Their Way Up

The analysts have been saying it for months and we’ve been talking about it for the past few weeks. The most recent reports of mortgage rates show that they have been steadily increasing and they are currently at five-month highs. Some are saying the reason for the spike is due to the government’s plan that could extend tax cuts for a couple years. Here are some numbers to give you an idea of the average rates:

* For 30-year fixed rates, the percentage jumped from 4.46 percent to 4.61 percent this week. This is the fourth week in a row that mortgage rates for this product have increased according to Freddie Mac.

* For a 15-year fixed rate loan, mortgage rates went from 3.81 percent last week to 3.96 percent this week.

* Rates for a five-year adjustable rate mortgage went from 3.49 percent last week to 3.6 percent this week. That’s not much of an increase, but it is still an increase. The same is true for one-year adjustable rate mortgages. They went from 3.25 percent last week to 3.27 percent this week. Again, that’s not much of a jump but it is still indicative of mortgage rates increasing across the board.

These increasing rates are following a seven month streak of decreases which have had many people excited about investing in properties and even purchasing their first home. But the extension of the tax cuts is something that many investors are looking at as a sign that the economy could receive a boost next year. Between the tax cuts, extending unemployment benefits and other things swirling around in the economy, many analysts are expecting at least a small turnaround financially.

Some analysts are expecting new home buyers to hurry up and purchase homes now before the mortgage rates go up any higher. “Once people see this might actually be the bottom, they go for it,” said Paul Dales, an economist at Capital Economics Ltd. One sign that he may be on to something is the fact that mortgage loan applications increased by nearly two percent for the week that ended on December 3. That was the third straight week that the number of applications increased. What’s going to be next for the mortgage industry? Only time will tell.