30-Year Fixed Mortgage Rates Above 5 Percent

Mortgage rates above 5 pct for 1st time in 3 mos (6/4/09, AP):

"Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year fixed-rate mortgages rose to 5.29 percent this week, from an average of 4.91 percent a week earlier. It was the highest weekly average in nearly six months.

"Mortgage rates "caught up to the recent rise in long-term bond yields this week," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement."

The benchmark 10-year Treasury note has seen the yield go up from 3.21% on May 1 to 3.70% today, 15% increase (data: US Treasury).

30-year fixed rate jumbo loans are being offered between 6% and 7% for people with credit scores of 700 and above, according to Bankrate.com.

"While signs are building that the battered U.S. housing market is beginning to stabilize, higher rates could endanger any recovery, since borrowers would be able to borrow less money and might decide to hold off on their purchases.

"Mortgage applications fell 35 percent last week from a week earlier, the Mortgage Bankers Association said Wednesday. Applications to refinance existing loans, which had made up about three quarters of mortgage applications earlier this spring, fell to about 60 percent of loan volume."

Remember the number of applications is NOT equal at all with the number of applications APPROVED.

This just in:
SEC charging ex-Countrywide CEO Mozilo with fraud (3:28PM EST, 6/4/09 AP).
Bank of America bought Countrywide in January 2008. The Senate Banking, Housing & Urban Affairs Committee Chairman Chris Dodd received a favorable loan from Countrywide as a F.O.A. (Friends Of Angelo Mozilo).

The stock market reaction has been no reaction.

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