Mortgage Rates Rise This Week

Average interest rates on U.S. 30- and 15-year mortgages rose this week, according to a weekly survey released by Freddie Mac on Thursday.
The industry’s most common and benchmark home loan product, the 30-year fixed-rate mortgage, averaged 6.21 percent, up from 6.15 percent.

Meanwhile, 15-year home loans, traditionally a popular mortgage refinance option, inched up to 5.92 percent from 5.87 percent.

One-year adjustable rate mortgages remained unchanged in the week at 5.48 percent, according to the Freddie Mac survey.

A year ago, 30-year home loans averaged 6.60 percent, 15-year mortgages 6.20 percent and the one-year ARM 5.62 percent.

“[U.S. home loan rates] inched up this week following the Federal Open Market Committee statement reiterating that the predominant concern remains the risk that inflation will fail to moderate as expected,” Frank Nothaft, Freddie Mac V.P. and chief economist, said in a statement.

“However, as long as core inflation continues to trend down and economic growth remains sub-par it is unlikely that we will see major movement in mortgage rates,” Nothaft said.

Many experts agree, saying it’s unlikely there will be much shift one way or the other in home mortgage loan rates between now and 2008.

On Wednesday, the Commerce Department said U.S. April housing starts rose 2.5 percent to an annual rate of 1.528 million units.

Building permits fell 8.9 percent in April to a 1.429 million unit rate, the lowest since 1.402 million units in June 1997.

Freddie Mac said that a mortgage lender charged an average of 0.4 percent in fees and points on 30- and 15-year mortgages this week, both figures representing declines from 0.5 percent last week.

Fees on the one-year ARM remained unchanged at 0.7 percent.

The “5/1″ adjustable-rate mortgage, set at a fixed rate for five years and adjustable each year after that, averaged 5.92 percent, up from 5.89 percent last week.

Fees and points charged on the hybrid mortgage - an option getting less popular amid widespread lender and mortgage broker troubles - was offered for 0.5 percent, down from 0.6 percent the week before.

Chartered by Congress, Freddie Mac buys mortgages from a home loan lender and packages them into securities to sell to investors on the secondary market to hold in its own portfolio.

SOURCE: Reuters