Mortgage Rates Ease a Bit

Original Post Date: February 18, 2011

By: Nathan Becker

Mortgage rates declined in the latest week, with the average rate on 30-year fixed-rate mortgages landing at 5%, according to Freddie Mac’s weekly survey.

Rates slumped through most of last year as yields on Treasurys declined. But yields have been on the rise recently, pushing mortgage rates back up. The rates generally track the yields, which move inversely to Treasury prices.

Although rates have risen fairly sharply lately, Freddie Chief Economist Frank Nothaft said they “still continue to be very affordable.” He noted that before 2009, rates for 30-year fixed-rate mortgages had never been as low as 5%. Freddie started tracking them in 1971.

The 30-year fixed-rate mortgage averaged 5% for the week ended Thursday, down slightly from the prior week’s 5.05% average and above the year-ago level of 4.93%. In last week’s survey, the 30-year rate climbed to its highest level since April.

Rates on 15-year fixed-rate mortgages were 4.27%, down from 4.29% in the previous week and down from 4.33% a year earlier.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.87%, down from the prior week’s 3.92% and 4.12% a year earlier. One-year Treasury-indexed ARMs were 3.39%, up from 3.35% last week but down from 4.23% a year ago.