Bankrate, Freddie Mac: Mortgage rates move little

By Palm Beach Business.com

DELRAY BEACH — Mortgage rates moved higher over the past week, but not by much, according to surveys from Freddie Mac and Bankrate. Both surveys were released Thursday.

Freddie Mac’s Primary Mortgage Market Survey found the 30-year fixed-rate mortgage averaging 4.74 percent with 0.8 point, up from 4.71 percent a week ago.

Bankrate’s national mortgage survey put the 30-year at 4.94 percent with 0.40 point, up from 4.93 percent a week ago.

“Mortgage rates were little changed during the holiday week amid reports that inflation remains tame,” Freddie Mac chief economist Frank Nothaft said.” Both the December core producer price index and consumer price index matched the market consensus. Compared to December 2009, core consumer prices rose at a 0.8 percent rate, the smallest yearly increase since records began in 1958.”

Bankrate noted a gap between fixed and adjustable rates has grown significantly in the last six months, with fixed rates moving higher while adjustable rates have moved lower. Some of the hybrid adjustable rate products, like the 5/1 ARM and the 7/1 ARM, now represent compelling value for borrowers that have ample equity and don't expect to be in the house more than a handful of years or so. But this strategy isn't without risk, as the rates will eventually begin annual adjustments.

The inability to sell the home, or a change in circumstances, could throw a wrench into those plans. But a homeowner moving on before the first adjustment enjoys a low fixed rate without the worry of upward movements.

Also from the surveys:

Freddie Mac put the 15-year fixed-rate mortgage at 4.05 percent with 0.8 point, down from 4.08 percent a week ago.

Bankrate put the 15-year at 4.29 percent, with 0.37 point, same as a week ago.