February 15, 2008 in Business

30-year mortgage rates rise

Associated Press The Spokesman-Review
 

WASHINGTON – Rates on 30-year mortgages rose to the highest level in five weeks but still remained below 6 percent.

Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 5.72 percent this week, up from 5.67 percent last week.

The 30-year mortgage started the year at 6.07 percent but dropped the next week to below 6 percent and has remained below that threshold for six weeks, raising hopes that lower rates will help spur a rebound in the housing industry.

Other mortgage rates were mixed with only slight movements in any category this week. Analysts attributed that to mixed economic news on the economy with some indicators showing signs of strength such as a report that productivity increased in the fourth quarter while others such as pending home sales indicating continued weakness.

While low mortgage rates and falling home prices are making housing more affordable, banks have been tightening credit standards, making it harder to qualify for loans, said Frank Nothaft, chief economist at Freddie Mac.

A sustained rebound in home sales is not expected to occur until the middle of the year after the number of homes for sale is reduced to more manageable levels.

Rates on 15-year mortgages, a popular choice for refinancing, edged up to 5.25 percent, compared to 5.15 percent last week.

Rates on five-year adjustable-rate mortgages dipped to 5.19 percent, compared to 5.21 percent last week, while rates on one-year ARMs were unchanged at 5.03 percent.

A year ago, 30-year mortgages stood at 6.30 percent while rates on 15-year mortgages were at 6.03 percent.


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