LONG-TERM LOAN RATES EDGE STILL HIGHER.

Byline: Gregory J. Wilcox

Home shoppers, who've caught a break lately with moderating appreciation rates and ballooning inventory, got smacked by reality this week.

Long-term interest rates hit their highest level in nearly four years.

And there is not much of a spread between the traditionally cheaper adjustables anymore, either.

Here's what turned up in the weekly rate survey by mortgage giant Freddie Mac.

The 30-year, fixed-rate mortgage averaged 6.49 percent for the week ending April 13. That was up from 6.43 percent the prior week and was the highest since mid-July of 2002.

A year ago, the weekly survey had the 30-year rate averaging 5.91 percent.

The rate on 15-year, fixed-rate mortgages, a popular choice for refinancing, averaged 6.14 percent this week, up from 6.10 percent last week.

A year ago, the rate on this product was 5.46 percent.

The one-year adjustable rate mortgage increased to 5.61 percent this week from 5.57 percent.

A year ago, the rate averaged 4.30 percent.

Rates on the five-year, hybrid adjustable averaged 6.13 percent this week, up from 6.11 percent in the prior week.

A year ago it averaged 5.31 percent.

Bottom line: Borrowing is getting more expensive.

Of course, we've been spoiled by a protracted run of low rates over the past few years. And these rates are still consider low versus some other times.

The financial pain is current, even though the wide range of home loan products has turned buying a house into a lot like buying a car. Or a plasma TV.

"People focus on their monthly payment," said Dan Blake, director of the San Fernando Valley Economic Research Center at California State University, Northridge.

Some people will be able to absorb the increase.

Others will have to settle for a less expensive home or act fast if they find one that's priced right.

And still others will be forced to rent for a while longer.

Blake notes that rates have settled into a pattern of moving up for a while, then coming back down.

Since rates are tied to the global economy, it's hard to predict where they will head, he said.

It's a complicated dynamic but here's an oversimplification of why.

Foreign governments invest huge amounts of money in government securities because they are considered safe. And when they put a lot of money in Treasury bills, other government instruments and corporate securities, it tends to push down the rates that consumers pay.

Now Blake said that some governments are pulling some money out or not putting as much in and that tends to push the long-term rates up.

Then there is the job market.

When it gets good, the rate picture turns bad for home buyers.

Wall Street is now worried that that lower unemployment could drive up wages and thus inflation. For example a week ago the federal government said that the nation's unemployment rate dipped to 4.7 percent in March.

"The threat of higher inflation, as we all know, invariably leads to higher mortgage rates," Frank Nothaft, Freddie Mac's chief economist, said in a statement.

And there has been talk that the 30-year rate could hit 7 percent by year's end.

The rising rates have not had much of an impact yet on the San Fernando Valley market and a better sense of its direction comes Monday with release of March numbers.

"What we're seeing is certainly not a repeat of the last three years of escalating sales and prices," said Jim Link, the executive vice president of the Van Nuys-based Southland Regional Association of Realtors.

"Sales are being made and buyers are negotiating and sellers have to be realistic."

greg.wilcox(at)dailynews.com

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