 | Rates Reverse Course
In Freddie Mac's results of its Primary Mortgage Market Survey the 30-year fixed-rate mortgage averaged 3.98% for the week ending January 27, 2012. That is up from the previous week when it averaged 3.88%. Last year at this time, the 30-year FRM averaged 4.80 percent. ý
Fixed mortgage rates ticked up this week as the housing market ended 2011 on a high note with existing home sales increasing 5.0 percent at the end of the year.
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Despite the jump, this marks the eighth consecutive week the 30-year fixed has remained below 4.00%.
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Rising Rents Make Home Buying a Better Choice
 Fallen home prices and record-low mortgage rates have pushed housing affordability to a 40-year high. Meanwhile, rental prices are continuing to rise at a fast pace, according to a new report released by Hotpads.com, a online rental listing service.ý
Rental prices in 20 of the largest metro areas increased 3.75 percent in 2011, and prices are expected to continue to rise in 2012.
Meanwhile, home prices fell by 1.83 percent in 2011, according to the report.ý
"In a lot of cases it's getting to a point where it makes more sense for people to buy because rent has been going up significantly faster, while home prices have been falling," Paul Gleger, author of the report, told AOL Real Estate.ý | |
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Home Affordability Offering Up 40-Year Deals
 Home affordability is at 1971 levels, due to falling home prices and record low mortgage rates, pushing home ownership in reach to more families, according to the U.S. Department of Housing and Urban Development (HUD).Home owners are bringing in nearly double the median income they need to cover the cost of an average home, HousingPredictor reports.ý
"With interest rates at historically low levels and markets across the country beginning to improve, home ownership is within reach of more households," Bob Nielsen, chairman of the National Association of Home Builders, said in a statement.
However, some consumers are finding more stringent lending standards for getting a mortgage a roadblock to home ownership. | | |
| | Fed Vows to Keep Rates Low Until 2014
 The Federal Reserve announced that short-term interest rates will likely stay near zero for nearly three more years, a move that is expected to spillover to long-term mortgage rates for home buyers and home owners.
In August, the Fed had made a rare move to say it would keep rates near zero until at least mid-2013. The Fed said in January that the economy still needs more help and it will now extend that period to 2014.ý
Fed Chairman Ben Bernanke said in a news conference that the Fed isn't happy with the modest economic recovery and that the Fed may need to take additional steps to spur recovery. He did not comment further on what those steps might be, though.ý
While the economy has improved somewhat in recent weeks, Fed officials say it's worried about "strains in global financial markets" and the still high unemployment rate.ýSome critics say that the Fed's vow to keep mortgage rates low won't do enough to help the economy and the housing market. They argue that too many Americans are already unable to take advantage of the record low mortgage rates because of the tightening of lending standards.ý
Bernanke shared that concern, saying that millions of home owners were unable to refinance because of damaged credit or being from underwater in their homes.ý | |
