Freddie Mac announced today that the average rate for 30-year fixed-interest rate loans has risen to 5.05%, up from last week’s 4.93%. Average rates on 15-year fixed-interest rate loans also rose, to 4.4% from last week’s 4.33%. This is the first rate increase in the last three weeks. Interest rates are evaluated weekly by Freddie Mac, the Fedaral Home Loan Mortgage Corporation.

Austin Mortgage Bankers See Rates Climbing

We have spoken with several respected Austin real estate mortgage bankers, and all are in agreement that once the Federal Reserve stops buying Mortgage Backed Securities through subsidies, that interest rates will gradually climb as private money enters the mortgage market. The current Fed mortgage purchasing incentives are set to expire at the end of March. Of course, there’s nothing to say that these incentives won’t be extended and keep rates low, for the short-term.¬† But, there has to be a breaking point where rates will be forced to climb. The government simply cannot subsidize the situation forever.

Interest Rates, Tax Credits, and Home Buyers

The lesson to take away from this: if you are on the fence and are looking to purchase a home at the lowest possible interest rate AND take advantage of current¬†tax credits, seriously folks, now may be the last chance to do so. Yes, this week’s interest-rates for 1-year Adjustable Rate Mortgage’s went down from 4.23% to 4.15%, signalling that private investors believe that in the short-term, rates may drop slightly. But, the housing tax credit deadline is looming and is highly unlikely to be extended (although anything can happen).

What are your thoughts regarding the current interest rate situation and real estate prices in the short-term, particularly in the Austin area?

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