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Mortgage rates fall for second straight week

Associated Press

WASHINGTON — Rates on 30-year mortgages fell for a second straight week, helping to get the housing industry off to a good start in the new year.

Freddie Mac’s weekly survey of mortgage rates released Thursday showed that rates on 30-year, fixed rate mortgages averaged 5.74 percent for the week ending Jan. 13, down from 5.77 percent last week.

Low mortgage rates have powered homes sales. Analysts believe sales hit a record high for all of 2004 and the housing market is expected to post another good year in 2005.

Amy Crews Cutts, Freddie Mac’s deputy chief economist, noted that 30-year mortgage rates averaged 5.84 percent for all of last year, a significant improvement over an average of 9.5 percent for the past 30 years.

“The onset of 2005 bodes well for the housing industry,” she said.

She said rates are likely to end the year above 6 percent, reflecting in part the credit tightening campaign of the Federal Reserve, which is raising rates to keep inflation in check.

Some analysts believe rates on 30-year mortgages could climb to around 6.5 percent by the end of this year, which would still be considered low by historical standards.

Rates on 15-year, fixed-rate mortgages, a popular option for refinancing, dipped this week to 5.19 percent, down from 5.21 percent last week. For one-year adjustable-rate mortgages, rates remained unchanged at 4.10 percent.

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