Amy Cutts Rates Quotations

Even with rising mortgage rates over the last four weeks, 30-year fixed-rate mortgage rates remain an historical bargain. To date, contract rates for these mortgages have been below 6 percent for 31 weeks in a row, and we don't expect these rates will rise very much above 6-1/4 percent by year end.

The onset of 2005 bodes well for the housing industry. Long-term mortgage rates are currently below six percent.

Shrugging off statements by the Fed last week, mortgage rates remained relatively more stable than bond market yields. Without a key indicator that would move it one way or another, the financial market is in something of a state of limbo.

With financial markets more optimistic that the economy is expanding nicely, mortgage rates had nowhere to go but up this week. Then, as a result of the GDP figures released today (Thursday), the market began weighing which part of GDP it feels is most dominant, growth or inflation.

Lower figures for the recently released producer price index and consumer price index and lower, but still strong, gross domestic product, combined with the seasonal slowdown in the housing market, led to another decline in mortgage rates this week.

Lower figures for the recently released producer-price index and consumer- price index, and lower but still strong gross domestic product, combined with the seasonal slowdown in the housing market led to another decline in mortgage rates this week.

The Fed's rate hike on Tuesday was expected and the Fed's cautiously optimistic outlook calmed the market. As a result, 30-year fixed mortgage rates should stay steady near or just below 6 percent for a while, giving prospective homebuyers another chance to get in with a low rate.

Last Friday's unexpectedly weak employment report caused interest rates on long-term Treasury bonds and, by extension mortgage rates, to fall as investors worried about the health of the U.S. economy.

The bond markets got a little ahead of themselves, causing yields to rise too quickly over the past few weeks. This week saw a bit of a correction and mortgage rates fell for the first time in eight weeks. Continued volatility in financial markets, however, will keep rates teetering up and down for some time to come.