Home Mortgage Loan Rates Creep Higher This Week

Mortgage rates inched up this week, but Freddie Mac was said Thursday that the mild rise was not inspired by troubles with bad credit home loans.

Average rates on 30-year mortgages, the benchmark of the nation’s home loan lenders, rose slightly to 6.62 percent from 6.59 percent.

Freddie Mac, which conducted the weekly survey, says that at least so far, the problems in the bad credit mortgage market are contained.

“Problems in the non-prime mortgage market, where funds are expensive and hard-to-get, have not significantly affected the prime conforming market,” Frank Nothaft, Freddie Mac vice president, said.

Rates on 15-year mortgages - traditionally a popular mortgage refinancing option - averaged 6.30 percent, compared with 6.25 percent last week.

Average rates on the one-year adjustable rate mortgages (ARMs) also rose, to 5.67 percent from 5.65 percent.

The “5/1″ ARM, set at a fixed rate for five years and adjustable each year after that also inched up, to 6.35 percent from 6.33 percent.

Earlier on Thursday, the Commerce Department reported that housing starts in July were at the lowest pace since January 1997, while building permits fell to the lowest rate since October 1996.

The average rates on 30-year home mortgage loans this week remained just a bit above their year-ago level, when they were at 6.52 percent.

At the same time last year, the 15-year mortgage rates averaged 6.20 percent, the one-year ARM was at 5.65 percent and the “5/1″ was at 6.18 percent.

U.S. mortgage lenders charged an average of 0.4 points on 30-year loans in the past week, the same as last, and 0.5 points on 15-year home loans, up from last week’s 0.4.

Across the county, loan origination points on the “5/1″ mortgage remained at 0.5, while those on the one-year ARM rose to 0.6 from 0.5.

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

SOURCE: Reuters