Mortgage Rates Move Slightly Higher

U.S. home loan rates changed very little this week as some small increases in various economic figures left experts guessing, Freddie Mac reports.

The government-sponsored home loan buyer said the average rate on a 30-year fixed-rate loan - the benchmark mortgage product - rose to 6.46 percent for the week ending September 6, 2007 - up from 6.45 percent last week.

Last year at this time, 30-year mortgage rates averaged 6.47 percent.

Freddie Mac said mortgage rates were largely unchanged because the several of the most recent economic indicators show smaller-than-expected increases.

“Core personal consumption expenditure price index rose at an annualized rate of only 1.3 percent in the second quarter and consumer spending data showed a 1.9 percent gain in the core price index for the twelve months ending in July,” said Frank Nothaft, Freddie Mac vice president and chief economist.

“In other news, the recent Conventional Mortgage Home Price Index [CMHPI] release issued by Freddie Mac reported that on average, house prices grew by 0.1 percent in the second quarter, the slowest quarterly home price growth since the fourth quarter of 1994. For the past 12 months, home prices appreciated 3.3 percent, the slowest rate in 10 years.”

In its latest report, Freddie Mac said that rates on 15-year fixed-rate loans - popular with those seeking mortgage refinancing - averaged 6.15 percent in the latest week,up from 6.12 percent last week.

A year ago, the 15-year home loan rate averaged 6.16 percent. Meanwhile, the five-year adjustable-rate mortgages (ARMs) averaged 6.35 percent this week, rising from 6.34 percent last week.

A year ago, the 5-year ARM averaged 6.11 percent. One-year ARMs averaged 5.84 percent this week, up from 5.60 percent last week and 5.59 percent a year ago.

SOURCE: CNN Money