Conforming mortgage rates are up slightly this week after some better than expected economic news indicated that we may be closer to the bottom of the recession than not.  Typically, but not always, when the economy does better, mortgage rates go up -  more investors move their money out of the bond market and into stocks as companies and the economy become stronger, which causes rates to rise.  But even with the slight increase, mortgage rates have been pretty stable near their historic lows for the past month or so (see graph below).

From the Freddie Mac press release this week:

"Mortgage rates rose slightly this week amid positive economic news that the economy may be approaching the bottom of the recession," said Frank Nothaft, Freddie Mac vice president and chief economist.

"In addition, the positive news was corroborated by Fed Chairman Bernanke when he stated that he expects economic activity to bottom out, then to turn up later this year. He also noted that the housing market is beginning to stabilize. For instance, pending existing home sales rose for the second consecutive time in March and represented the first back-to-back monthly increase since March 2008. Furthermore, in its April 2009 Senior Loan Officer Opinion Survey, the Federal Reserve found the demand for prime mortgages rose for the first time since April 2007 when it first began collecting such detailed mortgage data."

Jumbo mortgage rates also rose slightly from 6.65% to 6.68% on average, according to bankrate.com.

 

For a historical chart of rates from 1971 to now see this post: Mortgage rates are at historic lows but what does it mean to you

Will the economy continue to show more positive signs?  Will rates continue to stay near their lows or start to tick up more over the next few weeks?  It's tough to tell which direction rates will go in the short term, but signs are pointing towards rates increasing towards the end of the year.  If you're buying or refinancing, keep a close eye on it, and watch for signs of increases coming down the line to make sure you capitalize on the best rates.

 

Do you have questions?  What are your thoughts?  Comment below!

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