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OC Mortgage Rates Back on the Rise

Mortgage rates in Orange County are back in the upper range after hovering between the 4% to 5% marks in the past two weeks. Brokers are now reporting rates of up to 5.6% on 30-year fixed-rate loans, exceeding the national average.

The figures vary from one servicer to another, but all agree that the rates are looking better. Jeff Lazerson, head of online brokerage Mortgage Grader in Laguna Niguel, says that today's lowest rate was 5.125, or 4.875% with one percentage point.

Other brokers report even higher rates: Paul Scheper of Trust one Mortgage reported rates of 5.25%, while WestCal Mortgage partner Jeff Altman says he has seen rates up to 5.625% on 30-year fixed-rate loans with no point fees.

Altman called it a “crazy day” as the rates changed two to three times in the course of a day. He added that he has rarely seen such volatility in the real estate market, even in similar recessions.

The national average is also the highest it has been since the start of the year, a Bloomberg report shows. According the statement, the Federal Reserve's efforts to drive down borrowing costs has stalled in the past few days.

Mortgage servicer Freddie Mac also showed that rates rose from an average of 4.91% to 5.29% this week on 30-year mortgages. This makes it the highest since December 2008, when figures were at 5.47%. Fifteen-year mortgages also rose from 4.53% to 4.79%.

New York economist Donald Rissmiller says that as rates go up, home prices need to go down in order to maintain market activity. The lower payments, he says, are what keeps buyers interested and brings stability to housing sales.

Other economists were quick to note that mortgage rates nationwide are still historically low. Some credit the rise to the increase in investor activity, saying investors are foreseeing inflation as the market starts to recover.