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SUNDAY, NOVEMBER 22, 2009
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Mortgage Rates Hit 3-Month High

Housing and consumer-spending rebound hopes endangered

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(Newser) – Mortgage rates jumped to a three-month high yesterday, putting hopes for a rebound in the housing market and consumer spending at risk, the Wall Street Journal reports. The average 30-year fixed rate hit 5.44% from 5.29% the day before and 5.03% Tuesday. The rates make it tougher for homeowners to lower payments by refinancing, which in turn can hurt consumer spending.

“The spike in rates has the potential to derail a lot of things,” said a strategist. And mortgage delinquencies and defaults are rising with job losses. Some 5.7% of prime fixed-rate loans, 49% of subprime adjustable-rate loans, and a record 12.1% of first-lien home mortgages were past due or in foreclosure in late March.

In this May 9, 2008, file photo. a foreclosure sign stands outside a home in Denver.
In this May 9, 2008, file photo. a foreclosure sign stands outside a home in Denver.   (AP Photo/David Zalubowski)
A foreclosed home is shown in Mountain View, Calif., Thursday, May 28, 2009.
A foreclosed home is shown in Mountain View, Calif., Thursday, May 28, 2009.   (AP Photo/Paul Sakuma)
A sign advertising a 30-year fixed rate mortgage of 4.875% is displayed at the entrance of a Northeast Bank branch office, Thursday, March 19, 2009, in Brunswick, Maine.
A sign advertising a 30-year fixed rate mortgage of 4.875% is displayed at the entrance of a Northeast Bank branch office, Thursday, March 19, 2009, in Brunswick, Maine.   (AP Photo/Robert F. Bukaty)
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TerrifiedCitizen
May 29, 09 12:26 PM CDT
I thought the purpose of handing the banks money on a silver tray was so they could offer 'affordable' mortgages. Reply
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