Mortgage rates up for 5th week

It was the best of years, it was the worst of years. The year 2009 will be remembered for having the lowest mortgage rates in generations, even as the government worked like the dickens to keep homeowners out of foreclosure.

The year ended with a five-week streak of rising mortgage rates -- the longest such streak of 2009.

The benchmark 30-year fixed-rate mortgage rose 9 basis points this week, to 5.33 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.46 discount and origination points. One year ago, the mortgage index was 5.64 percent; four weeks ago, it was 4.01 percent.

The benchmark 15-year fixed-rate mortgage rose 11 basis points, to 4.73 percent. The benchmark 5/1 adjustable-rate mortgage rose 7 basis points, to 4.77 percent.

For all of 2009, the average rate on the 30-year fixed was 5.38 percent. That's easily the lowest it has been in the 24-year history of Bankrate's weekly survey. The last year in which rates were consistently lower was probably 1956. According to monthly data from the National Bureau of Economic Research, rates on FHA mortgages averaged about 4.85 percent in 1956 -- the year Elvis Presley recorded "Heartbreak Hotel" and Play-Doh was introduced to the world. If those cultural touchstones aren't familiar to you, ask your grandparents.

Before this year, 2004 had marked the lowest mortgage rates in Bankrate's quarter-century history of collecting rate data. In 2004, the 30-year fixed averaged 5.88 percent. The year before, 2003, the 30-year fixed averaged 5.89 percent. Those years were the apex of the housing boom and of the refinancing boom. House prices were skyrocketing in much of the country, and foreclosures were rare because homeowners could simply sell if they could no longer afford the monthly payments. After all, the house was worth more than the loan amount.

In 2009, the average rate on the 30-year fixed never reached 6 percent. It topped out at 5.95 percent at the end of June. It reached a record low (in Bankrate's survey) of 5 percent the week of Thanksgiving. Twenty-o-nine would have been the biggest and best refinancing opportunity in decades -- but millions of homeowners weren't able to refinance because they owed more than their homes were worth, or close to it.

The Obama administration developed a two-track program to help homeowners get lower mortgage payments. The Home Affordable Refinance Program encouraged lenders to refinance mortgages for more than the homes' current values. The Home Affordable Modification Program paid servicers to modify mortgages for homeowners who were in danger of falling into foreclosure.

Neither initiative made much of a dent in the first six months. In the third quarter, about 369,000 homeowners were served with foreclosure papers. During the same period, about 274,000 homeowners were given HAMP trial modifications. No one tracks HARP refinances, but the numbers are believed to be small.

There are signs that house prices are close to bottoming out in some markets. Home values might even rise in 2010, although that's not a certainty. Mortgage bankers are confident, though, that rates will rise in 2010. Most predict that rates will go up early in the year, when the Federal Reserve stops buying mortgage-backed securities.

Higher rates could end refinancing opportunities for even more homeowners.

If you're in the market for a mortgage or refinance, you can look for the best interest rate by searching Bankrate's rate tables. And you can calculate your monthly payment using Bankrate's mortgage calculator.