Politicians Bickering Drives Mortgage Rates up to 5.7%
Politicians might talk about a fixed 4% mortgage rate, but so far it is shaping up to be nothing but talk. Their lack of real action to improve the countries finances, restore confidence to the finance and real estate markets and their poor showings in past results with the TARP have fueled the market to increase actual interest rates to a 6 week high of 5.7%, almost 2% higher than the fairy tale levels of 4%.
The average 30-year fixed mortgage rate rose to 5.70% from 5.48% for the week ended Feb. 4, according to Bankrate.com. The average 15-year fixed rate mortgage increased to 5.31% from 5.10%, and the average jumbo 30-year fixed rate jumped to 7.12% from 7.06%. Adjustable rate mortgages were mixed over the past week, with the average 1-year ARM falling to 5.73% from 5.87% and the 5/1 ARM increasing to 5.5% from 5.41%.
Politicians seem to caught up in their fight over a stimulus package that doesn’t appear to have any stimulus in it at all. Simultaneously, the weekly number measuring the people that became unemployed rose again this week to 626,000 people in a single week.
We currently have more unemployed people in total in the United States than we have ever had in the nations history.
The latest rise in mortgage rates seems to rest squarely on the shoulders of the Federal Reserve and Barack Obama for signing on to the Nancy Pelosi stimulus plan.
Mortgage rates have been climbing since the Federal Reserve released its most recent post-meeting statement on Jan. 28, which was noncommittal about the possibility of buying long-term Treasury securities in an effort to reduce mortgage rates.
But offsetting that move is the government’s massive stimulus plan, which is being paid for via Treasury auctions.
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