Posted on: Friday, October 24, 2003

30-year mortgage rates hold steady for 2nd week at 6.05%

By Martin Crutsinger
Associated Press

WASHINGTON — Rates on benchmark 30-year mortgages, after rising for two straight weeks, were unchanged this week as the bond market stabilized.

For the week ending today, the average rate on 30-year mortgages held steady at 6.05 percent, the same as last week, Freddie Mac, the mortgage giant, reported yesterday in its weekly nationwide survey of mortgage rates.

Rates on 30-year mortgages slid to 5.21 percent, the lowest level in more than four decades, in the middle of June. In late June, those rates started marching back up, but then they posted a month of declines. However, earlier this month they started rising again, breaking above the 6 percent level last week.

Economists said a factor in the recent increases were signs that the economic expansion was accelerating, putting upward pressure on bond rates. The stabilization this week reflected calmer market conditions, analysts said.

"There was no financial news that would push rates either up or down significantly," said Frank Nothaft, Freddie Mac's chief economist.

Rates on other mortgages were mixed this week.

For 15-year mortgages, rates edged up slightly to 5.39 percent, from 5.36 percent last week. Rates for one-year adjustable mortgages averaged 3.76 percent, down from last week's 3.79 percent.

Even with the recent gyration in mortgage rates, home sales are expected to set new record highs this year.

The nationwide averages for mortgage rates do not include add-on fees known as points. Thirty-year, 15-year and one-year ARMs all carried average fees of 0.7 point this week.

A year ago, rates on 30-year mortgages averaged 6.31 percent, 15-year mortgages were 5.70 percent and one-year adjustable mortgages stood at 4.30 percent.