30 Year Mortgage Hit 6.62 Percent
The interest rate for a 30 year fixed mortgage hit 6.62 percent nearing its 4 year high. The interest rates for a 15 year fixed rate home loan came in at 6.20 percent and a One Year Adjustable Rate Mortgage (ARM) is at 5.2 percent. The rising rates are pressuring builders and home sellers as the cost of home ownership is increasing.
But do not forget, these rates are still lower than the average over the last 20 years.
This week’s average rate was the highest since the week ending June 20, 2002, when 30-year mortgages were at 6.63%.
The housing sector, which has enjoyed five boom years, is exhibiting numerous signs of slowing under the impact of rising mortgage rates.
The latest such evidence was a report from the National Association of Realtors on Thursday. It said that sales of existing homes fell 2% in April. The median price of homes sold last month rose at the slowest pace in 4 1/2 years.
Analysts believe housing will experience a gradual slowing this year but not a crash as long as the Federal Reserve calls a halt soon to its two-year campaign to push interest rates higher to slow the economy and control inflation.
Federal Reserve Chairman Ben Bernanke said last week that while housing is slowing down this year, “this looks to be a very orderly and moderate kind of cooling.”
Average 30-year rate rises to 6.62%.
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