Mortgage Informer

Mortgage rates in the U.S. rose for the first time in five weeks, threatening to slow the housing market’s recovery as government incentives near expiration.

The rate for 30-year fixed U.S. home loans rose to 5.01 percent for the week ended today from 4.98 percent, mortgage finance company Freddie Mac said in a statement. The average 15- year rate was 4.40 percent, according to the McLean, Virginia- based company.

Rising rates make it more expensive for consumers to buy homes. Sales of existing homes climbed 5 percent in 2009 after falling for three years. Demand rose as buyers took advantage of an $8,000 government tax incentive and low mortgage rates.

“The spring will probably look really good,” said George Mokrzan, senior economist at Huntington National Bank in Columbus, Ohio. “My concern is more the second half of the year. The tax benefits go away and I think the mortgage rates will probably go up.”

The government’s tax benefit program gives buyers until April 30 to have a signed contract on a home and until July 1 to close on it. Mokrzan forecasts that 30-year mortgage rates will rise to 6 percent by the end of the year.

The Federal Open Market Committee plans to end its $1.25 trillion mortgage-backed securities-buying program at the end of March. The purchases are credited with helping reduce mortgage rates, which fell to a record low of 4.71 percent in December.

Bond purchases from Fannie Mae, Freddie Mac and Ginnie Mae, which buy mortgages from lenders and package them into securities, brought down yields and allowed lenders to reduce mortgage rates while still selling the bonds at a profit.

The Mortgage Bankers Association’s index of mortgage applications rose 21 percent in the week ended Jan. 29, led by a 26 percent increase in the refinancing gauge. The purchase measure rose 10 percent.

Related posts:

• Mortgage Rates on 30-Year U.S. Loans Fall to 4.95%
• Mortgage Rates on 30-Year U.S. Loans Fall to 4.97%
• Mortgage rates on 30-year loans rise to 5.08 percent
• Mortgage Rates Hit 8-Month High
• Mortgage Rates on 30-Year US Loans Fall to 5.06%

Tags: Mortgage, Mortgage Rates