Jun. 1, 2009 - Mortgage rates spike, now what?

Last week 30 yr rates rose to nearly 5.50%

The average weekly rate for the 30-year fixed rate mortgages that dominates the market rose to 5.45 percent.   Mortgage rates jumped as much as three-quarters of a point Wednesday following a surge in interest rates on benchmark Treasury securities. Check here for today's rates.

Some are saying that the party is over for near historically low rates. Others believe rates will fall again to the 5 percent range. So, for home buyers who didn't lock in lower rates, what do you do now?  Qualifying first time home buyers might consider using the 10% tax credit (up to $8,000) to buy down the rate. Bankrate.com offers some advice for home buyers and homewoners looking to refinance.

Keeping things in perspective; since 1985, the 30-year fixed mortgage rate has averaged 7.84 percent. That's distorted by years of double-digit rates in the 1980s and the early 1990s, but even if you look at more recent times, today's rates still look good. In 2007, the median rate on the 30-year fixed was 6.26 percent. According to Bankrate.com, the average 30-year fixed mortgage rate was 6.20 percent in 2008.