Mortgage Rates May Have Finally Hit The Bottom Line

Though the average rate for 30-year, fixed-rate mortgages rose to 4 percent from 3.9 percent, as researched by Freddie. Last year at this time the rate was averaged at 4 percent.

While the Federal Reserve has helped push rates down to record-low levels with an easy money policy, unprecedented economic growth is now beginning to push long rates higher, said by Freddie Mac.

"Mortgage rates are caught up with increases in U.S. Treasury bond yields," Nothaft said in a statement. He also cited strong results from bank "stress tests" and a possible bailout for Greece. In the meantime, consumers continued to reduce their debt burdens in the fourth quarter of 2011, he informed. Payments of the debt as a share of income are now at the lowest level since 1994.

30-year rates hit a record low 3 percent in February and stayed there for three weeks, according to Freddie Mac survey. The rate is calculated on the basis of an average fee mortgage "point" of 0.8% of the loan amount.

Mortgage rates are still a bargain, even compared with the levels of a year ago. Rate of 15 reference years is now 3.30 percent, which is up from 3.16 percent of last week, and adjustable rate mortgage indexes may have had five years to 1.8 per cent, 2.79% last week. Last year at this time the rates were quoted at 4.04% and 3.21% for those products.

Although as rightly said Treasury bond rates and mortgage rates being on the rise will inevitably translate into higher rates of interest on credit at some point, failing to take into account number of factors.

In the first place, the last debt was borrowed on variable interest rate. Secondly, is 0 percent interest is really a sign of a healthy economy? It is hard to remember the last savings account which has paid 5% interest. That hell of an economy mentioned as healthy.

Thirdly, the duty not to be baggy of bailouts almost as much as it is because of the increased cost of maintaining all safety net. The safety net cost of bringing a debate is even more important. We argue over whether to raise taxes to cover the cost of the growth, or simply cut much needed programs right-thus reducing the net cost. Both are wrong! It did not cause more taxes to rise in net cost. We have not increased our system right either.

Our national debt debacle will not go away until both sides realize true reason of safety net costs which have increased. Whose job is this! If everyone who wanted a job could get a job that would cut the need for huge security net of expenses and mortgage rates confusions. Where 10-20% of our nation would be seeking financial assistance from the Government were instead, paying taxes on salaries in the Government, we would not have this debate.

"Ride" will remain "bumpy" until we all realize the true culprit and fix it. Its not just about mortgage rates but the whole economy.

by: jack smith

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