Mortgage Rates Climb as Housing Grasps For Recovery
By Jeff Cox, Special to CNBC.com | 03 Apr 2008 | 11:33 AM ET
Mortgage rates edged upward over the past week, despite the Federal Reserve’s aggressive cost-cutting measures and Wall Street’s eagerness to get past the housing crisis.
 |
|
AP |
A 30-year fixed-rate mortgage now costs 5.88 percent, up slightly from last week’s 5.85 percent, according to Freddie Mac, the second-largest US provider of home loan financing.
Rates are highest in the Northcentral region at 5.93 percent and lowest in the Southeast at 5.86 percent.
Mortgage rates have slipped from their recent high of 6.24 percent on Feb. 28 but borrowers continue to be hesitant to step back into the market.
Mortgage applications plunged 28.7 percent last week as the Mortgage Bankers Association said the rates, well below their year-ago level of 6.13 percent, failed to stem a huge drop in refinancing.
The move comes just as data is beginning to show the real estate market crawling its way back to recovery. The National Association of Realtors last week reported better-than-expected February home sales, and homebuilding has been the hottest sector of the stock market in 2008.
Overall the MBA’s mortgage index was up 6.0 percent from its 2007 level.
Rates for 15-year mortgages registered an especially sharp gain, from 5.34 percent to 5.42 percent. Five-year adjustable rate mortgages actually slipped from 5.67 percent to 5.59 percent, while one-year ARMs dropped from 5.24 percent to 5.19 percent.
ARM activity actually increased over the past week, suggesting banks were getting a bit more comfortable returning to the adjustable-rate issues that led to much of the subprime mortgage collapse. Banks have tightened lending requirements across the board, but particularly for borrowers with lower credit scores and less money for down payments.
|
|
|
