Mortgage rates are beginning to rebound

Procrastinators beware: Mortgage rates are beginning to rebound from record lows as the U.S. economy shows more and more signs of stabilizing.
“Rates are still low, but they’ve moved up from the super-low point they hit a few weeks back,” said Greg McBride of market-tracker Bankrate.com.
Average conforming-loan rates shot up a quarter-point in just two days last week, hitting 5.5 percent on Friday for zero-point fixed-rate mortgages given to well-qualified applicants. That’s up 0.375 points from an all-time-low 5.125 percent average rate Bankrate.com recorded early last month.
Then, the Labor Department reported Friday that America lost 539,000 non-farm jobs in April - 61,000 less than many analysts had forecast.
The three better-than-expected reports pushed mortgage rates higher as lenders priced in a possible economic recovery that could raise loan demand and increase inflation.
“The economic glass is now being seen as half full instead of half empty,” McBride said.
Although the analyst expects rates to fluctuate in coming months, McBride recommends would-be borrowers not wait to see if interest levels drop back downward.
After all, McBride said today’s rates are still well below the market’s 7.5 percent long-term average.
In addition, he said, some refinancers who qualify for loans today might not do so tomorrow if home values keep falling.
“People who wait to refinance could win the battle but lose the war,” McBride said. “If the value of your house drops and you no longer qualify to refinance, it doesn’t matter how low rates go.”


Source : www.bostonherald.com/business/real_estate/view/2009_05_11_Mortgage_rates_moving_back_up/srvc=home&position=also