Jumping mortgage rates and open house extravaganza
Mortgage interest rates jumped this week to the highest level since August, Freddie Mac economists report today. Thirty-year fixed rates hit an average of 5.21 percent -- which is up from last week's 5.08 percent -- and a half a percentage point above the record low recorded in early December. Thirty-year loans also charged 0.6 point in prepaid interest, on average. One point equals 1 percent of the loan amount.
Freddie Mac economists chalk it up to a couple of positive economic reports posted recently, including better employment numbers and a surprise 8.2 percent jump in pending existing-home sales logged in February. They didn't mention it, but retail sales also showed gains -- and the Fed's extraordinary program designed to drive down rates by buying mortgage-backed securities issued by Fannie Mae and Freddie Mac expired at the end of March, both of which could have helped boost mortgage rates.
Perversely, rising interest rates tend to boost home sales -- at least in the short term. Buyers who had been sitting on the fence often get jolted into action when they see rising rates eat into their new-home budget. Combine that with a major nationwide marketing push by Realtors to hold open houses on as many of their listings as possible over the April 10-11 weekend, and the market could get pretty interesting over the next week or so.
The Realtors are doing this open house push as we enter the final three weeks of the government's tax credit program for home buyers. Buyers need to be under contract by April 30 to qualify for the $8,000 first-timer tax credit or the $6,500 credit available to some repeat buyers.
Do you think the open house extravaganza is a good idea -- something that should be repeated more often? Or are you getting all the info you need from online photos? Share your thoughts in the comments!
April 8, 2010; 12:45 PM ET
Categories: Buying , Mortgages , Selling , Statistics , The market
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Posted by: tossnokia | April 8, 2010 3:45 PM | Report abuse
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