Mortgage rates continue to creep higher

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For nearly two months, people with good credit who can make 20% downpayments on homes have enjoyed 30-year mortgage rates below 5%.

But as signs of an improving economy increase, the yield on bonds has been edging higher and pulling home-lending rates along as well. Is the end of the sub-5% era in sight?

Freddie Mac’s widely followed rate survey pegged the average 30-year fixed mortgage at 4.94% for the week ending today, up from 4.81% a week earlier. The survey, to be posted on Freddie’s website later today, assumes borrowers pay 0.7% of the loan amount in upfront lender fees and discount points.

The low rates have given homeowners another golden opportunity to lower the interest rates on their mortgages. About three-quarters of all home loans were refinancings during the first two weeks of December, Freddie Mac economist Frank Nothaft said.

The Freddie Mac survey is just one of the tools consumers can use these days to monitor mortgage trends, with data also published by the trade group Mortgage Bankers Assn. (in a weekly applications survey) and private outfits such as Bankrate Inc. and HSH Associates.

Another entry in the rate-tracking derby, the nonprofit Fair Mortgage Collaborative, also has plans to publish regular updates on the cost of home loans. It is shooting to start providing information the second week of January, said Jeff Lazerson, a Laguna Niguel mortgage broker involved in the effort.

The group, with backing from the Ford Foundation, ‘will give average loan rates down to the ZIP Code, and all settlement costs, including third party, down to the state level,’ Lazerson said. ‘This very accurate, very complete, real-time and consistent benchmarking has never been done before.’

It remains to be seen whether the Fair Mortgage Collaborative can achieve its goal of having reporters quote its survey instead of Freddie’s. But in mortgage-shopping, as in most of life, more information is always better. So it will be interesting to check out the new data source, particularly to see how rates vary by ZIP Code.

-- E. Scott Reckard