Mortgage Rate Back Above 5% By Nathan Becker The Wall Street Journal 02-05-2010

Mortgage Rate Back Above 5%
By Nathan Becker
The Wall Street Journal
February 5, 2010

Home-mortgage rates generally rose slightly this past week, with the average on 30-year fixed-rate mortgages edging back above 5%, according to Freddie Mac's weekly survey of mortgage loans.

Rates remained "relatively stable" for a second week amid "news of a strengthening housing market," said Freddie Chief Economist Frank Nothaft. Pending existing-home sales rebounded 1% in December from a record drop in November that was due, in part, to the original expiration of home-buyer tax credit, according to the National Association of Realtors. They have since been extended.

"More recently mortgage applications for home purchases jumped 10% at the end of January, according to figures from the Mortgage Bankers Association," Mr. Nothaft added.

But demand for new homes fell in December as cold weather and continued high unemployment chilled hopes for a housing market recovery, with single-family home sales dropping 7.6%, the Commerce Department said last week. December's drop followed a 9.3% plunge in November.

Meanwhile, the 30-year fixed-rate mortgage averaged 5.01% for the week ended Thursday, up from the prior week's 4.98% average but down from 5.25% a year ago. Rates on 15-year fixed were 4.4%, compared with 4.39% and 4.92% respectively.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.27%, up from last week's 4.25% and down from 5.26% a year earlier. One-years fell to 4.22% from 4.29% and 4.92%.

To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point, the five-year adjustable mortgage required a 0.6 point and the one-year had an average 0.5 point. A point is 1% of the mortgage amount, charged as prepaid interest.