Posted on: Friday, February 18, 2005
30-year mortgage rate rises to 5.62%
By Martin Crutsinger
Associated Press
WASHINGTON — Rates on 30-year mortgages, which had fallen for six straight weeks, increased slightly this week, reflecting rising rates in financial markets.
Freddie Mac's weekly survey of mortgage rates released yesterday showed that rates on 30-year, fixed-rate mortgages averaged 5.62 percent for the week ending Feb. 10, up from 5.57 percent last week.
It was the first time 30-year rates had gone up since the last week of 2004. Rates on other types of mortgages rose as well.
Analysts said the rate increases occurred because investors chose to focus on a variety of economic reports showing strength in the economy, raising concerns about future inflation pressures.
Sales of both new and existing homes hit all-time highs in 2004 as mortgage rates remained at the lowest levels in more than four decades. Analysts said even with expected increases in mortgage rates this year, they believe housing sales will dip only slightly from their record levels.
They noted that builders in January started construction on the highest level of new homes and apartments in 21 years, indicating that the housing industry is confident of strong sales going forward.
"The little run-up in rates that occurred this week will not be enough to cause a significant slowdown in current housing market activity," said Frank Nothaft, chief economist at Freddie Mac.
Rates on 15-year, fixed-rate mortgages, a popular option for refinancing, rose to 5.14 percent, up from 5.10 percent last week. Rates on one-year adjustable-rate mortgages rose to 4.15 percent, up from 4.11 percent last week.
Five-year hybrid adjustable-rate mortgages averaged 5.05 percent this week, up from 4.99 percent last week. These hybrid mortgages have a fixed-rate for five years and then adjust each year after that.
The nationwide averages for mortgage rates do not include add-on fees known as points. The 30-year, 15-year and five-year mortgages each carried 0.7 point while the one-year ARM carried a fee of 0.8 point.
