Are Mortgage Interest Rates on the Rise?

Mortgage Interest Rates Report for the 1st Quarter

When the month began, the rates remained the same as that of March end. For a 30-year fixed mortgage rate, the rate increased a bit to 4.87%. This rate does not include points and is compared to the 4.86 percent rate of the prior week. On a 15-year FRM, the median rate is at 4.10%. This is only a slight change from 4.09 percent. Moreover, a one year adjustable mortgage rate declined to 3.22% from its 3.26% performance compared to the previous week.

According to Freddie Mac, the 30 year fixed mortgage rate decreased to 4.63% by the end of the May 12 week. This is below the 4.71% of the previous week and 4.93% of the prior year. Moreover, the 15 year FRM is at 3.82%. This is a decline from the 3.89% of the previous week and 4.30% of the prior year. The average adjustable rate mortgage of the 5 year treasury index hybrid is at 3.41%. This is a decline from 3.47% from last week and 3.95% from the year earlier. In addition, the 1 year Treasury indexed ARM is at the average of 3.11%. Similarly, it shows a decline compared to the 3.14% of last week and 4.02% of last year.

Since the year 2009, Freddie Mac finally made a profit while Fannie Mae kept on sinking with losses amounting to about $6.5 billion in the first quarter of the year. Freddie can go on even without the assistance of the government. On the contrary, Fannie Mae will need around $8.5 billion to be able to keep itself in business. Fannie Mae is down and many homebuyers are avoiding ARMs because of the risks involved. It has potentially higher payments with the possible interest rates in the future according to the chief economist of Freddie Mac Mr. Frank Nothaft.

In the year 2004, the share of adjustable for all loans reached up to 36%. The lowest point is at 2009 when around 2% of the mortgages were ARMs. It is Nothaft’s belief that the increase in shares would reach about 9% this year. An adjustable rate mortgage rate is basically a type of loan with changing interest rates. ARMs usually begin with small monthly payments compared to mortgages of fixed-rates.

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