Mortgage rates rise again

The interest rate of 30-year mortgages averaged 6.63% this week. In the last week the rate was 6.26%. The rates are increasing continuously for he last three weeks now. The interest rate will be hiked by Federal Reserve as the present condition shows a mixture of weak housing market, and rising inflation. The interest rate is still to touch the record mark of 6.69%.The reasons behind the increasing interest rate are concern about the increasing inflation, probability of Fed increasing the rates, and weakness of the housing market. Freddie Mac chief economist Frank Nothaft mentioned these factors as the causes of rising interest rate.

In the advent of the housing problems, the House is trying to help the housing sector as well as he troubled mortgage government enterprises. Recently, it has passed a legislation which will offer $300 billion in assistance. This money will be used to help the troubled homeowners and the finance giants Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500).

                                                             This Week           Last week

15-year fixed-rate mortgages                6.18%               5.78%

5-year adjustable-rate mortgage          6.16%               5.80%

1-year adjustable-rate mortgage          5.49%               5.10%

Another reports presented the ongoing problems and downturns in the housing market and how the sales of homes are going down. The National Association of Realtors (NAR) reported 4.86million home sales which is 2.6% down from May. The analysts expect it to go far lower. The report also presented the fact that the median price of a home is also going down an has reached $215,100. It is down 6.1% from $229,000 a year earlier.