Interest Rate Roundup for Dec. 16, 2010

Interest Rate Roundup
Mortgage rate graph


  • 5.0% (30-year fixed)
  • 0.4 (average points)

Here's a look at the state of mortgage rates from's weekly national survey of large banks and thrifts conducted Dec. 15, 2010.

Housing prices may be on the decline in much of the country, but mortgage rates are on the rise.

Bankrate's latest survey found the average 30-year fixed rate mortgage at 5 percent. Mortgages haven't been this costly in seven months, hitting 5.07 percent in early May before beginning a months-long descent that would eventually take them to record lows last month.

This week's climb for 30-year mortgages was relatively steep, rising 11 basis points from last week's 4.89 percent. A basis point is one-hundredth of 1 percentage point.

Shorter-term home loans are also on an upward march. The 15-year fixed mortgage averaged 4.37 percent. The gain, as with 30-year loans, was 11 basis points.

The 5/1 adjustable rate mortgage rose nearly as fast, gaining 10 basis points to settle at 3.95 percent.  

Jumbo mortgages, or generally those for more than $417,000, had the sharpest increases, with the 30-year jumbo rising 19 basis points to 5.58 percent.

The sharp leaps in mortgage rates seemingly run counter to market conditions. The most recent Standard & Poor's Case-Shiller Home Price Index found broad-based declines in home prices nationally. The widely watched index found that housing values declined in 18 of 20 major metropolitan areas during the third quarter of the year.

"The national index is down 1.5 percent from the third quarter of last year and 15 of 20 cities are down over the last 12 months," says David M. Blitzer, chairman of the index committee at Standard & Poor's.

Some analysts believe recent signs of improving economic activity in the U.S. is boosting mortgage rates, despite the Federal Reserve's efforts to drive down long-term rates through its QE2 program, which is injecting cash into the banking system.

Find out monthly mortgage payments using Bankrate's mortgage calculator.

-- Gregg Fields




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