Posted on: Friday, October 8, 2004
Nation's mortgage rates climb for second week
| • | Hawai'i Mortgage Rates |
By Jeannine Aversa
Associated Press
WASHINGTON — Mortgage rates around the country went up this week, with 30-year mortgages climbing to the highest level since early September.
Freddie Mac, in its weekly survey released yesterday, reported that rates on 30-year, fixed-rate mortgages rose to 5.82 percent for the week ending yesterday.
That was up sharply from 5.72 percent last week and marked the highest rate since the week ending Sept. 9, when 30-year mortgage rates averaged 5.83 percent.
Rates on 30-year mortgages hit a high this year of 6.34 percent the week of May 13.
Rates had slowly drifted downward as economic activity cooled in the late spring and early summer and inflation fears receded.
But rates rose in the past two weeks, reflecting investors' growing belief that the economy has emerged from its soft spot and is gaining some traction.
"The financial market thinks we've passed the 'soft patch' in the economy, which would translate into stronger growth in the coming months," said Amy Crews Cutts, an economist with Freddie Mac. "Stronger growth means a greater threat of inflation and that means interest rates will start to rise in response to the threat."
For 15-year, fixed-rate mortgages, a popular option for refinancing, rates increased this week to 5.24 percent, compared with 5.12 percent last week.
Rates on one-year adjustable rate mortgages climbed to 4.08 percent, up from 3.97 percent.
The nationwide averages for mortgage rates do not include add-on fees known as points. Each mortgage type carried a 0.6 point fee.
Even with the increases, rates are still considered low by historical standards.
Home sales are expected to hit record highs this year, aided by low mortgage rates.
A year ago, rates on 30-year mortgages averaged 5.77 percent with 15-year mortgages at 5.10 percent and one-year ARMs at 3.72 percent.
The Mortgage Bankers Association, meanwhile, said refinancing accounted for 47.1 percent of all home mortgage applications filed last week, up from 45.9 percent the previous week.
