Posted on: Friday, February 25, 2005
30-year mortgage rates climb for second week
By martin Crutsinger
Associated Press
WASHINGTON — Rates on 30-year mortgages edged up for a second straight week as financial markets worried anew about inflation.
The weekly survey by mortgage giant Freddie Mac, released yesterday, showed that rates on 30-year, fixed rate mortgages averaged 5.69 percent for the week ending Feb. 24, compared with 5.62 percent last week.
It was the second consecutive weekly increase. Before that, 30-year mortgages had fallen for six straight weeks, hitting a low for this year of 5.57 percent the week of Feb. 10.
Analysts said the rate increase occurred this week because investors chose to focus on a worse-than-expected jump in wholesale prices outside of food and energy.
"Mortgage rates moved up for a second week in a row on concerns about a pickup in inflation showing up in raw materials," said Freddie Mac's chief economist, Frank Nothaft.
Sales of new and existing homes set records 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.
Rates on 15-year, fixed-rate mortgages rose to 5.22 percent, compared with 5.14 percent last week. Rates on one-year adjustable-rate mortgages rose to 4.16 percent, compared with 4.15 percent last week.
Five-year hybrid adjustable rate mortgages averaged 5.05 percent this week, the same as 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 and 15-year each carried a 0.7 point financing fee while the one-year ARM and the five-year mortgages each carried 0.7 point fee.
A year ago, 30-year mortgages averaged 5.58 percent, while the 15-year was at 4.89 percent and the one-year ARM was at 3.5 percent. Freddie Mac — the Federal Home Loan Mortgage Corp. — does not have historical data yet on the five-year ARM.
