Posted on: Friday, February 6, 2004

30-year mortgage rises to 5.72% as rates continue to slowly climb

By Jeannine Aversa
Associated Press

WASHINGTON — Mortgage rates around the country rose this week but are still lower than they were a year ago.

The average rate on 30-year mortgages increased to 5.72 percent, up from 5.68 percent last week, Freddie Mac, the mortgage giant, said yesterday in its weekly nationwide survey of mortgage rates.

Rates on 30-year mortgages have bounced around after sinking to a four-decade low of 5.21 percent in the middle of June.

For 15-year mortgages, a popular option for refinancing, rates rose to 5.03 percent this week, up from 4.97 percent last week. Rates for one-year adjustable mortgages increased to 3.61 percent compared to 3.59 percent last week.

It marked the second week in a row that mortgage rates went up.

But even with the increases, mortgage rates are lower than they were for the same week a year ago.

A year ago, rates on 30-year mortgages averaged 5.88 percent, 15-year mortgages were 5.27 percent and one-year adjustable mortgages stood at 3.89 percent.

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

Home sales reached record high levels in 2003 powered by low mortgage rates that proved too good for buyers to pass up. Economists predict home sales will slow this year as mortgage rates creep up.

"Although mortgage rates are expected to rise, particularly in the second half of the year, general affordability conditions should be favorable in most of the country throughout 2004," said Walt McDonald, president of the National Association of Realtors.

Similarly, rising mortgage rates are expected to cool demand to refinance home mortgages, although activity is still expected to remain healthy.

The Mortgage Bankers Association said refinancing accounted for 57 percent of all home-mortgage applications filed last week, down from 58.5 percent the previous week.

On the Web:
Freddie Mac: www.freddiemac.com