30-year mortgage rates rising
By Jeannine Aversa
By Jeannine Aversa
WASHINGTON — Mortgage rates around the country went up this week, with rates on 30-year mortgages climbing to their highest point since late December.
Mortgage company Freddie Mac, in its weekly nationwide survey released yesterday, reported that rates on 30-year, fixed-rate mortgages rose to 6.23 percent for the week ending Feb. 2. That was up from 6.12 percent last week and was the highest rate since the week ending Dec. 22.
Rates are rising amid investors' concerns about inflation flaring up.
"Declines in worker productivity coupled with accelerating labor costs increase the threat of inflation down the road," said Frank Nothaft, Freddie Mac's chief economist. "Inflationary pressure generated by these two factors pushes long-term mortgage rates upward, which is why we have seen rates rise these last two weeks."
Before that, rates on 30-year mortgages had been drifting downward.
Meanwhile, rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, averaged 5.81 percent this week, up from 5.70 percent last week.
One-year adjustable rate mortgages increased to 5.33 percent this week, compared with 5.20 percent last week. Rates on five-year hybrid adjustable rate mortgages rose to 5.87 percent this week, from 5.75 percent last week.
Rising mortgage rates also come in the wake of the Federal Reserve's decision Tuesday to boost a key short-term interest rate to its highest point in nearly five years — an action aimed at fending off inflation.
The mortgage rates do not include add-on fees known as points. The 30-year and 15-year mortgages, along with the five-year hybrid adjustable rate mortgage, each carried a nationwide average fee of 0.5 point. One-year adjustable rate mortgages had an average fee of 0.7 point.
A year ago, 30-year mortgages averaged 5.63 percent, 15-year mortgages stood at 5.14 percent, one-year adjustable-rate mortgages were at 4.23 percent and five-year hybrid adjustable rate mortgages averaged 5.00 percent.
"Mortgage rates will surely fluctuate in the weeks and months ahead, but the trend now is for higher rates over the long run," Nothaft said.
The Mortgage Bankers Association predicts 30-year mortgage rates will rise to about 6.4 percent by the end of this year. Some analysts, however, believe this rate could end the year closer to 7 percent — if inflation picks up. Either way, rising rates are expected to slow home sales this year.