Mortgages
Rates on 30-year mortgages rose for the first time last year after four straight weekly declines.
Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 5.68 percent this week, up from 5.48 percent the previous week. That had been the lowest level for 30-year mortgages in nearly four years.
Economists attributed the slight increase to the rebound in rates that occurred on Treasury bond markets. Rates on 30-year mortgages are heavily influenced by the direction taken by 10-year Treasury bonds.
The Federal Reserve on Wednesday cut a key interest rate for the second time in just over a week as it continued an aggressive effort to lower borrowing costs to keep the economy from slipping into recession.
Frank Nothaft, chief economist at Freddie Mac, said various mortgage rates showed slight increases, gains that he said were “broadly consistent with the movements of Treasury bonds over the week.”
Even with the increase, the 30-year mortgage remained below 6 percent for the fifth straight week. Analysts are hoping this low level for mortgage rates will help spur a rebound in the housing market, which suffered steep declines last year in sales of both new and existing homes.
However, the sales rebound is not expected to occur until around the middle of the year after the number of homes for sale declines to more manageable levels.
Rates on 15-year mortgages, a popular choice for refinancing, edged up to 5.17 percent, compared with 4.95 percent the previous week.
Rates on five-year adjustable-rate mortgages increased to 5.32 percent, compared with 5.13 percent the previous week, while rates on one-year ARMs rose to 5.05 percent, up from 4.99 percent.
The mortgage rates do not include add-on fees known as points. Thirty-year mortgages, 15-year mortgages and five-year ARMs all carried a nationwide average fee of 0.4 point. One-year ARMS had an average fee of 0.7 point.
A year ago, 30-year mortgages stood at 6.34 percent while rates on 15-year mortgages were at 6.06 percent. Five-year ARMSs averaged 6.04 percent and one-year ARMs were at 5.54 percent this time a year ago.
Send news to Mike Benbow, Business editor, The Herald, P.O. Box 930, Everett, WA 98206, by fax at 425-339-3435 or by e-mail at economy@heraldnet.com.
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