November of last year saw 30 mortgage rates decline every week. This trend came to an abrupt end in the last month of 2009. December saw a .10 increase. This increase averaged out at 4.81% on December 10, 2009. The increased rate is still measurably lower than the 5.47% rate that was in effect one year prior.
These increased rates were felt across the board. 15 year fixed rate mortgages averaged at 4.32% in early December 2009, up from the 4.27% rate that was reported for the end of November 2009. Figures for one year earlier were far higher at 5.20%. Five year Treasury indexed hybrid adjustable rate mortgages increased slightly for the same time periods.
The positive numbers being reported on employment figures helped long term bond yields rise slightly. Mortgage rates responded to the favorable reports with marginal increases. Year end reports an approximate total increase of 0.7% lower rate than 1 year ago. This translates to $81.00 a month reduction in payment on a $200,000 mortgage.
The first quarter of 2010 will be interesting to watch as mortgage rates are expected to surpass 5%. This rate increase is not expected to chase borrowers away as they race to beat the April deadline on the $8,000 federal tax credit. The Mortgage Bankers Association is already reporting a visible increase in mortgage applications.
The year of 2009 will be remembered for the roller coaster of data that inspired and disappointed market watchdogs. No one can say for sure if we are truly out of the depths of the housing market crash. This next year will begin to see numerous changes and stricter federal guidelines in an attempt to stabilize the market and bring a sense of continuity to banking procedures. Once the federal tax credit expires in April we may see another attempt by the feds to extend their proverbial finger to stave off other leaks in the dam.
See Also:
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Rising Interest Rates: A headwind for housing – SeekingAlpha.com
Some of my friends benefited from the mortgage declined last year. His gut feelings were quite right when he planned to mortgage last November. I really agree that 2009 was, indeed, both inspiring and disappointing to market watchdogs.
Since we’re discussing the benefits of Home Mortgage Rates Increase as Year Ends, This immense amount of debt may force older homeowners to stay in the workforce in order to carry all of these housing expenses or they will be forced to sell their homes in order to downsize and limit the debt.