Mortgage Rates Rise Sharply For Week

After drifting down for the past three weeks, rates on 30-year mortgages rose to 6.73 percent this week, according to the weekly survey released by Freddie Mac Thursday.

That was a jump of 0.10 percent from last week’s average of 6.63 percent. On June 14 rates on 30-year mortgages, the benchmark for the home mortgage loan industry, reached an 11-month high of 6.74 percent.

Frank Nothaft, Freddie Mac V.P. and chief economist, said the mortgage finance giant expected home loan rates to stay around this level through the end of the year.

“Freddie Mac expects weakness in the housing market to persist in the second half of the year, with 2007 total home sales and housing starts hitting 5-year lows,” he added.

Average rates on 15-year mortgages - a popular mortgage refinancing option - also climbed to 6.39 percent from 6.30 percent a week prior.

The “5/1″ ARM, set at a fixed rate for five years and adjustable each year after that, averaged 6.35 percent, up from 6.29 percent last week.

The one-year ARM, on the other hand, remained steady at 5.71 percent this week. Increases pushed average mortgage rates close to year-ago levels.

Last year at this time, 30-year home mortgage rates averaged 6.74 percent and 15-years were 6.37 percent. The 1-year ARM averaged 5.75 percent and the 5-year was 6.35 percent.

On average, mortgage lenders charged an average of 0.4 points on 30-year and 15-year mortgages, the same as last week, and 0.5 percent on the ARMs, a rise from last week’s 0.4.

Freddie Mac is a mortgage finance company chartered by U.S. Congress that buys mortgages from lenders and packages them into securities to sell to investors or to hold in its own portfolio.

SOURCE: Reuters