Home mortgage rates are at a 6 month high. 

30 year mortgage rate: 4.61% up from 4.46%.

15 year mortgage rate: 3.96% up from 3.81%

Housing demand appears to be slowly picking up. “Existing pending sales jumped 10.4% in October to the strongest pace since April, according to the National Association of Realtors.

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For the first time in 5 weeks mortgage rates have fallen and backed off an 8 month high, yet still historically low. Spring selling is around the corner so rates will have to be attractive to assist in sales.

30 year fixed rate is at 5.07% down from 5.21% 8 month high. However, it’s still up from a year ago when rates were 4.71% an all time low.

Government incentives will be ending soon, notably the $8000 first time home buyer tax credit and the $6500 credit for home owners buying new houses, which will slow housing markets recovery.

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From Corbett B. Daly at Reuters: US housing agency ups mortgage deposits for some

The U.S. Federal Housing Administration said on Tuesday it will raise the minimum down payment required to secure an FHA-backed mortgage for less creditworthy borrowers as part of a series of steps to shore up the agency’s finances.

It also said it would increase the up-front mortgage insurance premium, which is paid by the borrower when the loan is made, to 2.25 percent from 1.75 percent.

The FHA said borrowers with credit rating scores below 580 would be required to make a down payment of at least 10 percent, while the rate for higher-ranked borrowers would stay at 3.5 percent.

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The FHA also said it was cutting the amount of aid sellers could provide buyers to 3 percent of the purchase price from 6 percent, a move it said could help lessen incentives to inflate appraised home values.

There is a lot more details in the article! It seems the FHA is learning its lessons the hard way by tightening their standards.

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Mortgage rates see record lows as fixed 30-year loans fell to 4.71% and 15-year rate standing at an average 4.27%. A direct result from the Federal Reserve’s program that allowed them to buy about $1.25 trillion in securities backed by home loans. Also contributing to the decline were Fannie Mae and Freddie Mac who purchased mortgages converted into bonds bringing down the yields that allowed lenders to reduce mortgages rates.

However, taking advantage of this historic buying opportunity (low interest rates/tax credit) is being hampered, with unemployment at 10% and the average American feeling low job security confidence. Its clearly obvious when Americans get their jobs back and unemployment rates decline that will lead the revival of the housing market. But till then the number of foreclosures will rise, and push existing home prices lower.

A bargain hunters dream! If you can afford to buy a house now…

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