honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Friday, April 13, 2007

Mortgage rates rise as U.S. jobs grow

By Martin Crutsinger
Associated Press

WASHINGTON — Mortgage rates around the country rose for a second straight week, with 30-year mortgages hitting the highest level since late February.

In its weekly survey, mortgage giant Freddie Mac reported yesterday that 30-year, fixed-rate mortgages averaged 6.22 percent this week. That is up from 6.17 percent last week.

Analysts attribute the increase to the government's release of better-than-expected job numbers for March, with the unemployment rate dipping to 4.4 percent, matching a five-year low, while 180,000 jobs were created, the strongest showing in three months.

That unexpected strength pushed interest rates higher as financial markets consider it less likely that the Federal Reserve will cut rates anytime soon.

In its latest forecast, the National Association of Realtors said Wednesday that the median price of an existing home is likely to decline this year by 0.7 percent from the 2006 level, which would be the first time on record that prices have fallen for the entire year.

The Realtors also forecast that tighter lending standards in the wake of rising delinquencies will depress sales this year further than had been expected. The Realtors project that existing home sales will drop to 6.34 million in 2007, down 2.2 percent from 2006, which had been the first year that sales had fallen after setting sales records for five straight years.

Other mortgage rates also rose this week, Freddie Mac said in its nationwide survey.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, rose to 5.90 percent this week, up from last week's 5.87 percent.

Five-year adjustable-rate mortgages averaged 5.93 percent, compared with 5.92 percent last week. One-year adjustable mortgages edged up to 5.47 percent from 5.44 percent last week.

The mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages both carried a nationwide average fee of 0.4 point. Five-year and one-year adjustable mortgages each carried an average fee of 0.5 point.

A year ago, rates on 30-year mortgages stood at 6.49 percent, while 15-year mortgages were at 6.14 percent. Five-year adjustable-rate mortgages averaged 6.13 percent and one-year adjustable-rate mortgages were at 5.61 percent.