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The Honolulu Advertiser
Posted on: Friday, June 1, 2007

Mortgage rates rise 3rd time to 6.42%

By Martin Crutsinger
Associated Press

WASHINGTON — Rates on 30-year mortgages rose for a third straight week, hitting the highest level in eight months.

Mortgage giant Freddie Mac reported yesterday that 30-year fixed-rate mortgages averaged 6.42 percent in its nationwide survey this week.

That was up slightly from 6.37 percent last week and represented the highest point for 30-year mortgages since they averaged 6.43 the week of Sept. 14.

Analysts attributed the increase to signs of economic strength outside of housing such as the April rise in orders for big-ticket manufactured goods.

"Recent reports have indicated that economic growth outside of the housing market remains robust with a healthy consumer sector and improving business spending," said Frank Nothaft, Freddie Mac's chief economist.

The government reported yesterday that the overall economy, as measured by the gross domestic product, rose at a barely discernible 0.6 percent rate in the first three months of this year, the slowest pace in more than four years.

But analysts believe growth has rebounded in the current quarter with expectations that the GDP is currently rising at a much healthier pace.

Rates on 15-year fixed-rate mortgages, a popular choice for refinancing, rose to 6.12 percent this week, up from 6.06 percent last week.

Five-year adjustable-rate mortgages averaged 6.19 percent, up from 6.02 percent.

One-year adjustable mortgages were the only category to show a decline, dipping to 5.57 percent from 5.64 percent last week.

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