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The Honolulu Advertiser
Posted on: Friday, December 21, 2007

Inflation fears pushing up mortgage rates, analysts say

By Martin Crutsinger
Associated Press Economics Writer

WASHINGTON Mortgage rates edged up for a second straight week and 30-year loans reached their highest level in a month.

The mortgage company Freddie Mac reported yesterday that 30-year, fixed-rate mortgages averaged 6.14 percent this week. That compares with 6.11 percent last week and was the highest since averaging 6.20 percent the week of Nov. 21.

Just two weeks ago, 30-year rates had dipped to 5.96 percent, the lowest in more than two years.

Analysts attributed this week's increase to worries about inflation stemming from sharp increases in consumer and wholesale prices as well as unexpected strength in a report on retail sales.

"Stronger-than-expected inflation reports and retail sales for November put upward pressure on long-term interest rates last week," said Frank Nothaft, chief economist at Freddie Mac.

Rates on 15-year fixed-rate mortgages rose to 5.79 percent from 5.78 percent last week.

For five-year adjustable-rate mortgages, rates increased to 5.90 percent, compared with 5.89 percent last week. Rates on one-year adjustable-rate mortgages moved to 5.51 percent from 5.50 percent last week.

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