November 5, 2004 in Business

Mortgage rates rise, but slightly

Associated Press
 

WASHINGTON — Mortgage rates around the country rose this week but are still at levels that should continue to provide support to the vibrant housing market, analysts say.

Rates on 30-year, fixed-rate mortgages averaged 5.70 percent for the week ending Nov. 4, Freddie Mac said in its weekly survey released Thursday. That was up from 5.64 percent last week.

Rates on 30-year mortgages hit a high this year of 6.34 percent the week of May 13. Since then, rates had drifted lower as inflation fears eased.

Wall Street investors more recently have been trying to sort through a mixed bag of economic reports to get a feel for the economy’s direction.

“The slight increase in mortgage rates this week was due in large part to volatility in long-term bond yields. The uncertainty in bond yields reflected weakness in the manufacturing industry that was offset by economic reports of strength in the service sector,” said Frank Nothaft, Freddie Mac’s chief economist.

For 15-year, fixed-rate mortgages, a popular option for refinancing, rates rose this week to 5.08 percent, up from 5.01 percent last week. For one-year adjustable rate mortgages, rates averaged 4 percent this week, compared with 3.96 percent last week.

The nationwide averages for mortgage rates do not include add-on fees known as points. Each loan type carried a 0.6 point fee.

Low mortgage rates have aided the housing market, which is expect to see record-high sales for all of 2004.

“When taken as a whole, this week’s economic data point towards both low mortgage rates and a growing economy, both of which are good news for current homeowners looking to refinance and for families hoping to become homeowners,” Nothaft said.

A year ago, rates on 30-year mortgages averaged 5.94 percent with 15-year mortgages at 5.26 percent and one-year ARMs at 3.74 percent.

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