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Rates on 30-year mortgages rebound

Rates on 30-year mortgages, which had fallen for two weeks, resumed their increases this week.
/ Source: The Associated Press

Rates on 30-year mortgages, which had fallen for two weeks, resumed their increases this week.

Mortgage giant Freddie Mac reported Thursday that rates on 30-year, fixed-rate mortgages averaged 6.32 percent this week, up from 6.26 percent last week.

Rates three weeks ago had hit 6.37 percent, which had been the highest level in more than two years.

Analysts said the booming housing sector, which has been cooling a bit under the weight of rising rates, should slow further in coming months. The slowdown, however, won’t be enough to stop sales of both existing and new homes from setting a fifth straight record in 2005, economists said.

Frank Nothaft, chief economist at Freddie Mac, said even with the recent increases, 30-year mortgages, by far the most popular mortgage type, so far this year have remained close to the averages set in the past two years.

“These low rates helped the housing market set records for home sales and new construction over the past three years,” he said. “Looking ahead, as mortgages rates rise, housing activity will ease somewhat.”

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, averaged 5.87 percent this week, up from 5.81 percent last week.

One-year adjustable rate mortgages were unchanged at 5.16 percent while rates on five-year hybrid adjustable rate mortgages averaged 5.78 percent this week, up slightly from 5.76 percent last week.

The nationwide averages for mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried a nationwide average fee of 0.6 point while one-year ARMs had a 0.8 point fee and five-year hybrid ARMs carried a fee of 0.7 point.

A year ago, 30-year mortgages averaged 5.71 percent, 15-year mortgages were at 5.14 percent and one-year ARMs averaged 4.15 percent. Freddie Mac does not have historical data on the five-year ARM which it began tracking this year.