Apt A Go Go

Average Mortgage Loan Rates Rise for the 4th straight week

Rates hit highest level since 2002
Associated Press
WASHINGTON - Rates on 30-year mortgages edged up slightly last week as fears about the Federal Reserve’s next rate moves lessened a bit.

Freddie Mac, the mortgage company, reported Thursday that rates on 30-year, fixed-rate mortgages increased to a nationwide average of 6.79 percent this week, up from 6.78 percent last week.

It was the fourth weekly increase and put rates at the highest level for 30-year mortgages since they averaged 6.81 percent the week of May 24, 2002.

Housing sales, which have set records for five straight years, are expected to decline by around 7 percent this year as higher mortgage rates make home ownership more expensive.

The Fed last week raised interest rates for a 17th consecutive time, but in a statement explaining the action the Fed said future changes would be driven by incoming economic data. That eased worries in the financial markets that the central bank could overdo the tightening and raise the risks of a recession.

Frank Nothaft, chief economist at Freddie Mac, said he was still looking for only a gradual rise in mortgage rates this year as long as the Fed does not become overly worried about inflation.

“The interest rate for the 30-year fixed-rate mortgage will gradually drift upward, but should remain under 7 percent for the year,” he said.

Rates also rose slightly for other types of mortgages this week, according to the Freddie Mac survey.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, increased to 6.44 percent, up from 6.43 percent last week.

Rates on one-year adjustable rate mortgages rose to 5.83 percent, up from 5.82 percent last week and the highest level in more than five years.

Rates on five-year adjustable-rate mortgages were unchanged at 6.39 percent, the same as last week.

The mortgage rates do not include add-on fees known as points. The 30-year and 15-year mortgages carried carried a nationwide average fee of 0.5 point. The five-year ARM had a nationwide average fee of 0.6 point and the one-year ARM carried a fee of 0.8 point.

A year ago, 30-year mortgages averaged 5.62 percent, 15-year mortgages stood at 5.20 percent, one-year ARMs were at 4.33 percent and five-year ARMs averaged 5.19 percent.