Mortgage Rates at the highest levels in 10 months – Over 5% Now
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30 Year Fixed, 15 Year Fixed and 5/1 ARM California Mortgage Interest Rates continue to rise.According to Freddie Mac Primary Mortgage Market Survey® both long- and short-term mortgage rates rose last week too.
30-year fixed-rate mortgage (FRM) averaged 5.05 percent with an average 0.7 point for the week ending February 10, 2011, up from last week when it averaged 4.81 percent.15-year FRM this week averaged 4.29 percent with an average 0.7 point, up from last week when it averaged 4.08 percent.5-year adjustable-rate mortgage (ARM) averaged 3.92 percent this week, with an average 0.6 point, up from last week when it averaged 3.69 percent.
Note that these average mortgage rates are for conforming loans of $417,000 and lower. Conforming jumbo (loan amounts between $417,001 and $729,750) have higher interest rates.
Why the Jump in California Mortgage Rates?
Long-term bond yields jumped on positive economic data reports, which placed upward pressure on mortgage rates this week. For all of 2010, non farm productivity rose 3.6 percent, the most since 2002, while January unemployment rate unexpectedly fell from 9.4 percent to 9.0 percent. Also, the service industry expanded in January at the fastest pace since August 2005. These positive economy news has caused the interest rates on a 30-year fixed-rate mortgage jump to the highest level since the last week in April 2010. See the chart below.
California Mortgage rates Forecast:
Interest rate markets continue their bearish trend and outlook. The economy is improving, as long as it continues and with the threat of inflation still high, rates will not show much improvement. I continue with my longer outlook that mortgage rates will continue to edge slowly higher but still not expecting a serious increase in rates. 5.5% on 30 yr mortgages by the end of the second quarter or early third quarter, then possibly a stabilizing at that rate till the end of 2011.
If you would like to remain updated on how Mortgage rates are changing on a daily basis, follow me on Twitter where I tweet about live California Mortgage Rates.
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