Friday, June 15, 2007

Mortgage rates moved up again

Reading mortgage-related news has been quite boring lately. Another story on low price appreciation, another story about a family of immigrants who were driven into a mortgage they couldn’t afford, some politician inventing new ways to preserve home ownership, some gloomy stats from the MBA … I’m almost getting used to all this. And then – shock horror – mortgage rates keep rising steadily for weeks and weeks. We were talking about 6.15% on a 30-year fixed-rate mortgage a month ago, and now the rate is 6.74%, up from 6.53 last week. Another bite out of affordability.

According to data released by Freddie Mac, 15-year fixed-rate mortgages carried an interest of 6.43, up sharply from 6.22% last week, and the five-year adjustable-rate home loans were at 6.37%, compared to 6.24% a week ago. One-year adjustable-rate mortgages averaged 5.75%, an increase from last week’s 5.65.

Another report issued by Freddie Mac on Thursday is drawing analysts’ attention – its first quarterly financial results in several years. Freddie Mac announced a loss of $211 million, or $0.46 per share, way lower than the expected $1.01 gain. Last year, Freddie Mac reported profit of $2 billion, $2.80 a share. Richard Syron, Freddie Mac’s CEO, however, believes that the company is on the path to stabilization and its “credit position has remained strong”. We’ll be looking forward to second-quarter results.

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