Fixed mortgage rate becomes increased mortgage rate?

The average U.S. rate on a 30-year fixed mortgage has been reported to have risen 5.25 percent this week from 5.10 percent recorded in previous week. There are projections that the government will increase borrowing costs. 

Measures on improving the situation are being taken already: President Obama is considering giving federal guarantees for modified home loans; the Senate is debating an economic stimulus package; and a Republican amendment to the bill that would temporarily offer homebuyers a tax credit worth $15,000 (or a 10 percent of a home’s purchase price, whichever is less) has been passed. 

The Federal Reserve had started buying $500 billion of mortgage-backed securities last month in order to affect prices for mortgage bonds.

At the same time, the number of Americans filing first-time claims for jobless benefits has increased dramatically, with 2.6 million jobs losses in 2008, the most since 1945. Initial jobless claims increased by 35,000 and made 626,000 in the week ended Jan. 31. The Labor Department has reported the rate to be the highest since October 1982. There are projections that the government report tomorrow on the jobs lost in January will be 540,000. 

The Standard and Poor’s Supercomposite Homebulding Index of 15 companies continues to decrease, as well. The index has decreased 43 percent in the last 12 months. The Commerce Department had reported that new-home purchases in December have dropped to 331,000, the lowest rate since 1963.