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Mortgage rates inch higher

November 1, 2010 - Those who sought a mortgage to refinance their relocations in the past week may have encountered higher rates.

Freddie Mac reported that the average interest rate on a 30-year fixed-rate mortgage rose to 4.23 percent from 4.21 percent the week before. It was the second consecutive time that the rate on 30-year FRMs rose. Though slightly more expensive, moving into a home with a 30-year loan is still far cheaper than it was a year ago at this time, when rates averaged 5.03 percent.

The report added that 15-year loans also saw an incremental increase in interest rates, rising from 3.64 percent to 3.66 percent. Five-year adjustable-rate mortgages actually dropped to 3.41 percent while one-year ARMs remained unchanged.

Frank Nothaft, Freddie Mac's chief economist, noted that even with rising rates, buying a home in today's market remains very affordable. "Historically low rates are supporting home sales and reducing the excess stock of homes available for sale. Existing home sales, including condominiums and co-ops, rose for the second consecutive month in September, up almost 18.0 percent over July's low," he said.

Additionally, the Commerce Department noted that the national housing inventory for new homes crept down to an 8-month supply in September, an encouraging sign that more people were moving into new homes last month.
 

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