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Percentage-254x300According to Mortgage Bankers Association, mortgage rates for California, Washington, Oregon and rest of the country rose sharply in the first week of 2013. The rates are now at the highest levels since November.

Fannie Mae 3% coupon (mortgage backed securities) tanked by 69 bps last week. This usually has inverse relation to the rates – mortgage backed securities going down in price means higher interest rates.

The average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.61% with 0.41 points (origination fees). This rate is at its highest level since the first week of November 2012.

The average interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 3.78%, with 0.38 points.

The average contract interest rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration (FHA) increased to 3.35 percent from 3.34 percent, with points increasing to 0.69 from 0.61.

The average contract interest rate for 15-year fixed-rate mortgages increased to 2.88 percent from 2.86 percent, with points increasing to 0.39 from 0.27.

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Outlook for Mortgage Rates:

The rates should stay at this level for next week or two. Once the debt ceiling conversation starts in congress, the market volatility would increase and mortgage rates would be impacted. If you are currently floating, lock on a day when the market improves. And if you are shopping for best mortgage rates in California, Washington or Oregon – contact us.