Posted on: Friday, March 5, 2004

30-year mortgage rate rises slightly to 5.59%

By Jeannine Aversa
Associated Press

WASHINGTON — Mortgage rates around the country were mixed this week, with rates on benchmark 30-year mortgages edging up and rates on other types of mortgages nudging down.

The average rate on 30-year, fixed-rate mortgages was 5.59 percent, mortgage giant Freddie Mac reported today in its weekly nationwide survey of mortgage rates. This week's rate was up only slightly from the seven-month low of 5.58 percent seen in the previous two weeks.

Rates on 30-year mortgages sank to 5.21 percent in the middle of June, the lowest level in more than four decades. Since then rates have bounced up and down.

For 15-year, fixed-rate mortgages, a popular option for refinancing, rates dipped to 4.88 percent this week from 4.89 percent last week. Rates for one-year adjustable mortgages decreased to 3.47 percent. That marked the lowest rate since the week ending June 27, 2003, and was down from 3.50 percent last week.

A year ago, rates on 30-year mortgages averaged 5.67 percent, 15-year mortgages were 5.01 percent and one-year adjustable mortgages stood at 3.76 percent.

The nationwide averages for mortgage rates do not include add-on fees known as points. Each loan type carried an average fee of 0.7 points this week.

Low mortgage rates powered home sales to record highs in 2003. Economists expects sales to be brisk for all of 2004 even if mortgages rates creep higher later this year. Some analysts believe rates on 30-year mortgages could end the year around 6.5 percent.

"As the economy becomes stronger, there is every expectation that mortgage rates may begin to drift slowly upward," said Frank Nothaft, Freddie Mac's chief economist.

With mortgage rates at low levels, the Mortgage Bankers Association said its index that tracks refinancing activity reached a seven-month high last week.