30-year mortgage rate rises to 6.03 percent

By Carlos Torres
Bloomberg News Service

WASHINGTON — The average rate on a 30-year fixed mortgage rose this week from the lowest in more than 30 years, according to Federal Home Mortgage Corp., the No. 2 buyer of U.S. mortgages.

The 30-year rate rose to 6.03 percent this week from 5.94 percent last week, which was the lowest since Freddie Mac started keeping records in 1971. The average rate on one-year adjustable mortgages rose to 4.14 percent from 4.09 percent, which was the lowest since those records began in 1984.

Mortgage rates will probably remain low in coming months because the U.S. economic recovery is struggling, Freddie Mac said. Low rates will help underpin housing, economists said.

"Economic reports are mixed and this will keep mortgage rates bouncing up and down somewhat, probably for the rest of the year," said Frank Nothaft, chief economist at Freddie Mac.

New-home construction fell in October to the lowest in six months, while permits for future building reached an eight-month high, the Commerce Department reported yesterday.

The increase in permits "is a good indication that the housing industry is still in great shape despite last month's apparent lull," Nothaft said.

The rate on a 15-year mortgage, a popular refinancing option, rose to 5.44 percent from 5.32 percent the previous week.

This week's 30-year fixed mortgage rate from Freddie Mac puts the average monthly payment on a $100,000 loan, including principal and interest with 1 point, at $601.48, down from $648.60 at the same time last year, when the rate was 6.75 percent.