30-yearFixed

If you think the tiny bump up in interest rates over the last week was bad, wait till you see rates a year from now.

No one can predict the future, of course, but there's good reason to think that average interest rates for 30-year home loans will be well above 5 percent or even 6 percent by the end of 2010.

The average interest rate for a 30-year home fixed-rate mortgage climbed to 4.94 percent, according to the Freddie Mac's Primary Mortgage Market Survey, released December 17. That's up from a historic low of 4.71 percent two weeks ago.

Average interest rates are under five percent for a number of reasons that can't last.

The epic drama of Wall Street bailouts and Main Street foreclosures riveted the nation in 2009. Meanwhile, financial industry groups and Washington policy advocates have been prepping for the big story of 2010: The fight over the future of Fannie Mae and Freddie Mac -- and with them, the fate of the 30-year, fixed rate mortgage that built the American dream.

The Obama administration has said that by February, it will lay out its vision for Fannie and Freddie, which in some form have been the bedrock of home mortgage financing since 1938. For months now, industry and consumer groups have huddled over bullet points, figuring out their official positions.

On the basics, they come surprisingly close to a consensus. Bankers and consumer groups alike want to essentially sign Fannie and Freddie up as contestants on The Biggest Loser. In place of gi-normous shareholder-owned, government regulated companies on a quest for stratospheric stock prices, the feds would back mini-Fannies that would sell and guarantee mortgage-backed securities under federal regulation. That would ensure that most Americans would continue to have access to long-term mortgages at fixed interest rates, something that wouldn't likely happen if left to the private market.