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While 30 year fixed mortgage rates continued to climb over Thanksgiving week, signaling perhaps that the low mortgage rate boom is ending, consumers still don’t think the housing market has reached bottom.

A new study from Fannie Mae (Stock Quote: FNM) reinforces that point. The Third Quarter Fannie Mae National Housing Survey concludes that Americans are “less certain that the housing market has bottomed.”

According to the quarterly survey of U.S. homeowners and renters, fewer Americans think it’s a good time to buy a home, compared to the June 2010 survey (68% - down 2% from the June survey). What’s more, 29% of Americans believe it’s a “bad time” to buy a home – up three points since June. Lastly, 85% of Americans believe it’s also a bad time to sell a home.

"Consumer attitudes toward buying a home are more negative since last quarter," said Doug Duncan, the chief economist at Fannie Mae. "Our survey shows that Americans' declining optimism about housing and their personal finances is reinforcing increasingly realistic attitudes toward owning and renting."

Certainly, the era of low mortgage rates looks like it’s over. From April 1 to Nov. 15, mortgage rates fell by an average of about 1%, falling to about 4.00% for the benchmark 30 year fixed mortgage rate.

But a tepid economic recovery (perhaps “stabilization” is a better term), more Federal Reserve stimulus money pouring into the U.S. bond market, and some evidence that consumer prices are once again on the rise have all fueled a run-up in mortgage rates over the course of November.

It will be interesting to see how Americans handle higher mortgage rates. The housing market may see more sellers on the market in early 2011, if housing prices continue to show some strength.

But with the cost of a new mortgage rising with higher rates, will buyers be there waving their checkbooks? That’s unlikely - at least not in high numbers if it happens at all.

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According to financial website The Mortgage Reports, the two week run-up in mortgage rates has added $14,500 in interest payments over the term of a new $300,000, 30year mortgage loan. If that number continues to rise, look for more potential homebuyers to think twice about buying as interest rates rise – especially if housing prices rise significantly.

Against that back story, let’s take a look at mortgage rates this week, as measured by the BankingMyWay Weekly Mortgage Rate tracker.


Description                             This Week                   Last Week

One Year ARM                       3.522%                        3.788%
Three Year ARM                     3.647%                        3.411%
Five Year ARM                       3.390%                        3.495%
15 Year Mortgage                    3.980%                        3.989%
30 Year Mortgage                    4.621%                        4.489%


For homebuyers, it’s “go time” – even as the heart of the holiday season beckons. Rates don’t look like they’re coming back down, at least over the long term. So if you can lock in that great 4.50% mortgage rate, do it now.

BankingMyWay’s Mortgage Rate Search can also help, as week to week, it’s your best bet for finding the best mortgage rate deal possible.

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