Mortgage Rates Rising

By: Diane Tuman, Content Manager | July 23, 2008

Last week’s news that Fannie Mae and Freddie Mac were in trouble and getting government assistance triggered a side effect: a rise in mortgage rates. According to a mortgage article in the New York Times on Tuesday, the average interest rate for 30-year fixed-rate mortgages rose to 6.71 percent on Tuesday, from 6.44 percent on Friday, according to HSH Associates, a publisher of consumer rates. Rates are rising because bond investors are frightened by Freddie and Fannie’s future stability. And without these two government sponsored enterprises there to lend money as freely as before, buyers won’t be able to get loans for homes at desirable rates, further slowing down the housing market.

In glancing at Zillow Mortgage Marketplace’s rates, it looks like today’s 30-year fixed rate is 6.47%, compared to 6.26% last week. If you’re in the market to buy a home, and you’re wondering whether you should lock the loan now or not, consult your lender who should have a feel for the ebb and flow of the market rates.