Mortgage rates inch up this week

Mortgage rates creep higher this week but the average cost of the mainstay 30-year fixed-rate home loan remains under 5% a year, Freddie Mac reports.

Mortgage rates crept higher this week but the average cost of the mainstay 30-year fixed-rate home loan remained under 5% a year, Freddie Mac reported.

The government-controlled housing finance firm said 30-year rates offered by lenders averaged 4.86%, up from 4.81% last week and 4.76% the week prior. The rate briefly topped 5% in February.

The terms offered by lenders this week included upfront fees averaging 0.7% of the amount borrowed.

The average rate on a 15-year fixed-rate mortgage rose to 4.09% from 4.04% last week. The start rate on variable loans with a fixed rate for the first five years climbed to 3.7% from 3.62%.

“Relatively benign” inflation reports are keeping home-loan rates low by historical standards, Freddie Mac economist Frank Nothaft said. But that hasn’t been enough to prop up home prices, which have been falling amid a large number of sales of homes with troubled mortgages.

Foreclosures are expected to increase this year as loan servicers lift moratoriums imposed because of improper handling of delinquencies and home seizures. That would tend to put more downward pressure on home prices as the large backlog of distressed mortgages works its way through the system.

Freddie Mac’s weekly survey asks lenders the rates they are offering to well-qualified buyers with a minimum 20% down payment and refinancers with at least 20% equity in their homes.

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