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Weekly Mortgage Outlook: April 27

By Brian O’Connell
We begin this week as rates on 15- and 30-year mortgages are on an upward trend, with 30-year rates moving from 5.06% last week to 5.12% this week.

15-year fixed rate mortgages rose even higher, from 4.71% to 4.80%. If there’s any downward movement out there it’s in one-year adjustable rate mortgages (ARMs), which fell from 4.99% to 4.67%.

But already mortgage analysts seem to think that rates have crested, and will fall back again as we march on toward May.

General Motors (Stock Quote: GM), which is fighting to stay out of bankruptcy, have put the breaks on the economy and the stock market this week, continuing to press its desire to say goodbye to its venerable Pontiac division.

Not helping economic matters much, and which could help chop mortgage rates down further, is a potentially big hike in unemployment. Some analysts, both in Washington and on Wall Street, say that unemployment will reach 9.8% by year’s end.

As for the swine flu issue, global governments have expressed enough alarm to contribute to fear from investors, and have certainly hurt stocks in hard-hit areas like Mexico. Japan has even gone as far as to insist on medical check-ups on plane travelers arriving from Mexico. That’s the kind of alarmism that keeps stocks down, and potentially crimps economic trade with affected countries.

The ensuing flight to bonds should reduce prices on fixed-income investments and keep mortgage interest rates low until both the swine flu issue and GM’s long-term future are sorted out – neither of which is happening this week.

Some other key influencers this week that should impact mortgage rates are the U.S. government’s consumer confidence and consumer spending numbers. If either number is soft, expect rates to drive lower.

For now, though, it’s a wait and see situation, as economists and traders look for some big issues to resolve themselves, but for homebuyers, the window for great deals on home mortgages remains open. To find the best ones, check out the Mortgage Rate Search function at manybanking.com.

—For more ways to save, spend, invest and borrow, visit MainStreet.com.

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