Posted on: Friday, December 31, 2004

30-year mortgage rate climbs to 5.81 percent

By Jeannine Aversa
Associated Press

WASHINGTON — Mortgage rates around the country moved up this week, but rates on 30-year mortgages for all of 2004 registered their second-lowest year on record.

Freddie Mac's weekly survey showed that rates on 30-year, fixed-rate mortgages increased to 5.81 percent this week, compared with 5.75 percent last week.

For all of 2004, rates on benchmark 30-year mortgages averaged 5.84 percent, second only to last year's 5.83 percent, the lowest annual rate in Freddie Mac's record keeping, a spokeswoman said. The rate came in under 6 percent for the last 22 weeks of this year.

"Although mortgage rates are expected to rise in 2005, it will not be to a big enough degree to take much of the steam out of the housing industry," said Amy Crews Cutts, Freddie Mac's deputy chief economist.

Some analysts believe rates on 30-year mortgages could climb to around 6.5 percent by the end of next year, considered low by historical standards. A few think rates could hit 7 percent next year.

Rates on 15-year, fixed-rate mortgages, a popular option for refinancing, rose this week to 5.23 percent, compared with 5.18 percent last week.

Rates on one-year, adjustable-rate mortgages increased to 4.19 percent this week, up slightly from 4.17 percent last week.

The nationwide averages for mortgage rates this week do not include add-on fees known as points. Each loan type carried a 0.6 point fee.