Due to the improving economy and the end of a government push to keep interest rates low, 30-year fix rates for home loans surged last week reaching their highest level in eight months.
Freddie Mac reported yesterday that the average rate on a 30-year fixed rate mortgage was up from 5.08 percent a week earlier to 5.21 percent this week which is the highest since mid-August when the average rate was 5.29 percent.
Last December rates had dropped to their record low of 4.71 percent which was due in part by a campaign by the Federal Reserve to reduce borrowing costs for consumers. Sadly, this program ended last week, but the Fed did leave the door open to reviving the program should the economy start to weaken yet again.
Each week Freddie Mac collects mortgage rates from Monday through Wednesday from lenders around the nation. The rates can often go up and down significantly, even within a day.
The rates do not include add-on fees known as points where one point is equal to 1 percent of the total amount borrowed.
As the economy slowly climbs its way out of the worst recession since the great depression of the 1930’s, now is the time to buy while interest rates are still low and there is an abundance of inventory to choose from.