Record home sales predicted even as key mortgage rates increase
By Jeannine Aversa
Associated Press
WASHINGTON — Mortgage rates around the country edged up this week, but remain lower than during the same period a year ago.
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For the week ending today, the average rate on 30-year mortgages increased to 5.89 percent, up slightly from 5.83 percent the previous week, mortgage giant Freddie Mac reported Wednesday in its weekly nationwide survey.
The improving economy continues to drive home purchases even though mortgage rates have bounced up and down. The rate on a 30-year mortgage is 5.89 percent.
Rates on 30-year mortgages slid to 5.21 percent, the lowest level in more than four decades, in the middle of June. Since then, rates on these benchmark mortgages have bounced up and down.
For 15-year mortgages, rates rose to 5.22 percent from 5.17 percent last week. Rates for one-year adjustable mortgages averaged 3.77 percent, compared with last week's 3.72 percent.
A year ago, average rates for 30-year mortgages stood at 6.13 percent, for 15-year mortgages at 5.57 percent and for one-year adjustable mortgages at 4.19 percent.
The nationwide averages for rates do not include add-on fees known as points. Each point represents 1 percent of the mortgage amount. Thirty-year mortgages carried an average fee of 0.6 point this week. Fifteen-year and one-year adjustable rate mortgages each carried an average fee of 0.7 point.
Even with the recent gyration in mortgage rates, economists predict home sales will hit a record high this year.
"A stronger economy and positive consumer confidence should continue to exert pressure on homebuilding and buying, ensuring that the housing market retains its vibrancy into the coming year," said Frank Nothaft, Freddie Mac's chief economist.
Separately, the Mortgage Bankers Association of America said refinancing accounted for 53.3 percent of all home-mortgage applications filed last week, up from 48.1 percent the previous week.
The association's index of total mortgage applications — for home purchases and refinancing — filed last week increased by 16.9 percent from the previous week.
"The strong purchase market continues to be driven by an improving economy, more people working and low-interest rates," said Jay Brinkmann, the association's vice president of research and economics.
