It’s a new year and a new landscape for mortgage rates, as most signs point to a 2010 that will see higher interest rates, as the economy improves and the Federal Reserve lifts rates to balance economic risk.
For the last week of 2009, interest rates were once again on the upswing, as measured by the BankingMyWay Weekly Mortgage Rate Tracker.
For the week, 15-year rates are up to 4.76% from 4.65%; while 30-year rates are up to 5.3% from 5.23%.
One-year adjustable-rate mortgages once again are fluctuating wildly — they’re down to 3.9% from 4.94% for the week. Three-year ARMs inched up to 4.57% from 4.54%. At the same time, five-year ARMs are climbing upward to 4.54% from 4.45%.
Mortgage rate watchers are surely buzzing over Federal Reserve Chairman Ben Bernanke’s comments this weekend to the American Economic Association in Atlanta. He told the audience that “all efforts should be made to strengthen our regulatory system to prevent a recurrence of the crisis, and to cushion the effects if another crisis occurs."However, if adequate reforms are not made, or if they are made but prove insufficient to prevent dangerous buildups of financial risks, we must remain open to using monetary policy as a supplementary tool.”
More tellingly, Bernanke said the Federal Reserve would raise interest rates to prevent another economic crisis.
Even with rising rates looming, mortgage rates start the decade significantly lower than they were ten years ago. In January 2000, the average 30-year mortgage rate was 8.6%. As the BankingMyWay rate tracker shows, we’re at 5.3% today, at the cusp of the new decade.