US 30-year mortgage rate held steady on Friday-Zillow
By Julie Haviv
NEW YORK, June 12 (Reuters) - Interest rates on U.S. 30-year fixed-rate mortgages stayed steady at 5.64 percent late Friday, according to real estate Website Zillow.com.
A week earlier, however, the mortgage rate was around 5.40 percent, according to Zillow Mortgage Marketplace.
The rate was sharply higher than the roughly 5.00 percent level seen at the end of May and at the beginning of this year, Zillow said.
Higher rates should hurt home purchase activity, and it has already collapsed home loan refinancing.
Alan Rosenbaum, president of Guardhill Financial, a New York City-based mortgage banker and brokerage company, said that while they had predicted for several months that mortgage rates were going to rise, they have been surprised by the velocity of the surge.
"Higher rates will be devastating to the rebound in the housing market," he said.
"The consumer is very nervous about purchasing a home at this time and the lower rates were giving them the extra boost of affordability," he said.
The housing market is being driven now primarily by first time home buyers who are very sensitive to mortgage rates, he said.
"If first time home buyers remain on the sidelines, foreclosures will continue to rise and values would then continue to drop throughout the country resulting in further national wealth destruction," he said.
The battered U.S. housing market, which is in the midst of its worst downturn since the Great Depression, is both the source of and a major casualty of the credit crisis.
A setback for the market could hamper a turnaround of the U.S. economy.
