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Rates go up on 30-year mortgages

Associated Press

WASHINGTON — Rates on 30-year mortgages rose for the first time in five weeks as investors awaited word from next week’s meeting of the Federal Reserve on the future direction of mortgage rates.

Mortgage giant Freddie Mac reported Thursday that the nationwide average for rates on 30-year, fixed-rate mortgages rose slightly this week to 5.74 percent, up from 5.71 percent last week.

It was the first increase for the 30-year rate since Aug. 11 when it climbed to 5.89 percent.

Analysts attributed the slight increase to investor concern about what the Federal Reserve might do next week.

“Mortgage rates were relatively unchanged this week as the markets wait for the results of the upcoming Federal Reserve policy committee meeting,” said Frank Nothaft, chief economist at Freddie Mac.

Many private economists believe the Feds will nudge a key short-term rate it controls up by another quarter-point at the Tuesday meeting, which would be the 11th rate hike since the Feds began gradually raising rates in June 2004.

However, some analysts argue that the Feds may decide to pause in its rate hikes next week until it can further judge the adverse impacts of Hurricane Katrina on the economy.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, averaged 5.32 percent this week, up from 5.30 percent last week.

One-year adjustable rate mortgages rose slightly to 4.46 percent from 4.45 percent last week.

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