Mortgage Rates Rise for Week of December 21

Mortgage rates moved upward across the board this week and could signal a trend just as home buyers and homeowners have gotten used to mortgage rates below 5%. As average rates for a 30 year fixed rate mortgage (FRM) rose from 4.94% to 5.05%, average rates for 15 year FRMs rose from 4.38% to 4.45 %. Average rates for 5/1 adjustable-rate mortgages (ARMs) increase three basis points from last week's 4.37% to 4.40%.

Rising Mortgage Rates, But Opportunity Remains

Mortgage rates remain relatively low, and coupled with the expanded home buyer tax credit program, buyers can find opportunities for lower mortgage payments or buying a larger home.

Under the new terms of the tax credit, buyers must sign a contract by April 30, 2010, and close by June 30, 2010. Eligibility for the tax credit now includes homeowners who've owned a home for five of the last eight years, and who meet maximum income limits (which have also been increased to accommodate more buyers).

Consult your tax accountant or financial advisor to evaluate how the tax credit program can work for you.

Unemployment, Economic Concerns Stalling Buyers

Foot-dragging and fence-sitting continue as would-be buyers heed concerns about job security and the unstable economy. With good news of slightly improved retail sales during the holidays and reports of expected increases in hiring, buyers may jump into the housing market.

As demand for homes increases, it's likely that home prices may also increase, and signal an end to depressed housing markets and the corresponding low home prices. Don't wait--getting a great deal on your next home and mortgage loan sounds like a winning resolution for the New Year.

Our live database of current mortgage rates can help you find the best rates in your area.