Mortgage Rates Hold Steady

After retreating last week, mortgage rates remained mostly flat this week, Freddie Mac and Bankrate reported Thursday.

According to Freddie Mac’s Primary Mortgage Market Survey, 30-year fixed-rate mortgages averaged 5.07% with an average 0.7 point for the week ending April 22, 2010, unchanged from last week but notably higher than this same week in 2009 when 30-year fixed-rate mortgages averaged 4.8%.

Freddie Mac said 15-year fixed-rate mortgages moved only slightly. Nudging down from last week’s average of 4.4%, 15-year fixed-rate mortgages averaged 4.39% with an average 0.6 point this week. This week’s average was lower than last year at this time when rates averaged 4.48%.

“Mortgage rates on fixed loans were relatively unchanged this week…,” said Frank Nothaft, Freddie Mac VP and chief economist. “These low mortgage rates are revitalizing the home construction industry.”

Bankrate reported the same trend of steady rates. According to its weekly national survey, 30-year fixed-rate mortgages averaged 5.22% with an average point of 0.42 this week, budging up from 5.21% last week. In addition, the tracking company said 15-year fixed-rate mortgages averaged 4.5%, a minor move down from 4.56% last week.

So far, mortgage rates seem to be largely unaffected by the close of the Federal Reserve’s mortgage purchase program, but to keep rates low, Bankrate said the Fed may need to “sharpen the rhetoric about raising interest rates when it becomes necessary to do so.” If the Fed instead appears soft, investors could lose confidence in their willingness to keep inflation at bay, and mortgage rates would quickly lose their anchor to these historic lows, the company explained.

Complementing Bankrate’s survey it its weekly Rate Trend Index, in which mortgage experts predict which way rates are headed over the next week. A rise in mortgage rates was forecast by 47% of those polled, and 41% said rates will remain more or less unchanged. Just 12 percent predicted a week-to-week decline.