Rules, Rates Keep Housing in Deep Freeze

Wall Street Journal (02/25/08) P. C1; Gongloff, Mark
Despite recent reports of slight improvements in home builder sentiment and new-home construction, experts suspect the housing market will not enter the recovery phase any time soon. Freddie Mac recently hiked fees to purchase mortgages for more than 80 percent of the home value, which spokesman Brad German says is necessary to "align our fees with the real risks in the marketplace." The fee increase--the second made by the federally chartered mortgage concern since November--will boost a 6 percent mortgage rate to 6.05 percent, German states. Meanwhile, recent rate cuts by the Federal Reserve have not been enough to stop inflation concerns from driving up long-term mortgage rates. However, short-term rates have fallen; and borrowers whose adjustable-rate mortgages are governed by the three-month London interbank offered rate have seen some relief.