Mortgage rates rise 0.12 points
By Jeannine Aversa, Associated Press
WASHINGTON — Mortgage rates rose this week, but they are still lower than a year ago and should continue to spur home sales.
The average rate on 30-year, fixed-rate mortgages rose to 5.52% this week, from 5.40% last week, mortgage giant Freddie Mac reported Thursday in its weekly survey of mortgage rates.
In mid-June last year, rates on 30-year mortgages sank to 5.21%, lowest level on record. Rates have bounced around since then.
A year ago, 30-year mortgages averaged 5.79%, 15-year mortgages 5.06% and one-year adjustable mortgages 3.82%.
For 15-year, fixed-rate mortgages, a popular option for refinancing, rates this week rose to 4.84% from 4.70% last week.
Rates for one-year adjustable mortgages moved up this week to 3.46%, compared with 3.36% last week, lowest since Freddie Mac began tracking rates on one-year ARMs in 1984.
"Even with rates slightly higher, the housing industry will continue to be an active, solid sector of the economy going into the spring buying season," said Frank Nothaft, Freddie Mac's chief economist.
"We don't foresee any major slowdown in the housing market this year," he said. "Quite the contrary, we are confident 2004 will be another banner year for home sales."
Low mortgage rates propelled home sales to record highs in 2003.
The nationwide averages for mortgage rates do not include add-on fees known as points. Each loan type carried an average fee of 0.6 of a percentage point this week. That's 0.6% of the loan amount.
Federal Reserve member Donald Kohn, in a speech Thursday, raised some concern about home prices, which have continued to climb. "The odds have risen that these prices could be out of line with fundamentals," he said. But, "We still cannot be very confident about whether a significant misalignment exists."
In another report, the Mortgage Bankers Association said refinancing accounted for 62.8% of all mortgage applications last week. That was down from 63.1% the previous week.
