WASHINGTON – Mortgage rates continued their upward climb this week, with rates on 30-year mortgages rising to their highest point since the middle of April.
In its weekly survey, mortgage giant Freddie Mac reported Thursday that rates on 30-year, fixed-rate mortgages rose to a nationwide average of 5.82 percent, up from 5.77 percent last week.
It marked the fifth week in a row that rates on 30-year mortgages went up. This week’s increase left rates on 30-year mortgages at their highest since they averaged 5.91 percent for the week ending April 14.
Yet rates on 30-year mortgages are still considered good and have stayed below 6 percent for all but two weeks this year. That has helped to propel home sales to record levels in June.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, averaged 5.38 percent this week, compared with 5.34 percent last week. This week’s rate also was the highest since the middle of April.
“Long-term mortgage rates will more than likely rise over the next few months, albeit modestly compared to shorter-term rates,” predicted Frank Nothaft, Freddie Mac’s chief economist.
For one-year adjustable rate mortgages, rates rose to 4.47 percent, a slight increase from last week’s rate of 4.46 percent. This week’s rate was the highest since one-year ARMs averaged 4.50 percent the week ending July 19, 2002.
Rates on five-year hybrid adjustable rate mortgages averaged 5.30 percent this week, up from 5.27 percent last week.
The Federal Reserve is widely expected to bump up a key short-term interest rate by another one-quarter percentage point when it meets on Tuesday. That would mark the 10th increase of that size since the Fed began to tighten credit in June 2004. Additional increases are expected this year.
The Fed’s rate increases directly affect short-term mortgage rates. Longer-term mortgage rates are more closely linked to what’s going on in the bond market.
The nationwide averages for mortgage rates do not include add-on fees. Thirty-year mortgages and 15-year mortgages each carried an average fee of 0.6 point this week. One-year ARMs and five-year ARMs each carried an average fee of 0.7 point this week.
A year ago, 30-year mortgages averaged 5.99 percent, 15-year mortgages were at 5.40 percent and one-year ARMs averaged 4.08 percent. Freddie Mac does not have historical data on the five-year ARM, which it began tracking this year.
Send items 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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