30-year mortgage rates rise
WASHINGTON (AP) - February 21, 2008 Freddie Mac, the mortgage company, reported Thursday that
30-year, fixed-rate mortgages averaged 6.04 percent this week, up
from 5.72 percent last week.
That is the highest level since the first week of the year, when
the 30-year mortgage stood at 6.07 percent. For the next six weeks,
the rate fell below the 6 percent level as financial markets
reacted to the sharp slowdown in economic growth and growing risks
of a recession by pushing interest rates lower.
However, increased worries about inflation have pushed long-term
rates higher in the past two weeks. However, one-year
adjustable-rate mortgages are still about one-half percentage point
lower than at the start of the year, reflecting the aggressive rate
cuts engineered by the Federal Reserve in January in an effort to
combat the economic slowdown.
"As the spread between long-term fixed-rates and
adjustable-rates widens, it is possible we could see a slight
increase in the popularity of adjustable-rate mortgages," said
Frank Nothaft, chief economist at Freddie Mac.
In other rate moves this week, rates on 15-year mortgages, a
popular choice for refinancing, edged up to 5.64 percent, compared
to 5.25 percent last week. Rates on five-year adjustable-rate
mortgages rose to 5.37 percent, up from 5.19 percent last week.
Bucking the upward trend, rates on one-year ARMs dipped slightly
to 4.98 percent, down from 5.03 percent last week.
The mortgage rates do not include add-on fees known as points.
Thirty-year mortgages and one-year adjustable-rate mortgages both
carried a nationwide average fee of 0.6 point. The 15-year
mortgages and five-year adjustable-rate mortgages both had average
fees of 0.5 point.
A year ago, 30-year mortgages stood at 6.22 percent while rates
on 15-year mortgages were at 5.97 percent. Five-year
adjustable-rate mortgages averaged 5.96 percent and one-year ARMs
were at 5.49 percent this time a year ago.
A sustained rebound in home sales is not expected to occur until
around the middle of the year after the number of homes for sale is
reduced to more manageable levels.
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On the Net:
Freddie Mac: http://www.freddiemac.com
