Friday, October 3, 2008

30-Year Mortgage Rates Edged Up To 6.10%

Recently, rates on 30-year mortgages have been climbing to the highest level in a month for a second straight week.

Freddie Mac, the mortgage company, reported that 30-year, fixed-rate mortgages averaged 6.10% this week, up slightly from 6.09% last week. It was the highest level since 30-year mortgages averaged 6.35% for the week ending Sept. 4.

Financial markets have been changing direction suddenly in recent weeks as demand for safe-haven Treasury securities has pushed those yields down significantly while rates on other types of corporate bonds have been pushed higher by growing worries about whether the bonds will be repaid.

Those crosscurrents have been reflected in mortgage rates that also have been on a rollercoaster, hitting a high for the year of 6.63% in late July and then falling down below 6% in mid-September.

The recent great anxiety in credit markets has forced those rates up from a seven-month low of 5.78% on Sept. 18, to above 6% for the past two weeks. According to the Freddie Mac survey, other rates were mixed this week. Meanwhile, rates on 15-year fixed-rate mortgages that are popular with people who are refinancing, climbed up to 5.78%, compared to 5.77% last week. Moreover, rates on five-year adjustable-rate mortgages dipped slightly to 6 % from 6.02% last week. However, rates on one-year adjustable-rate mortgages were unchanged at 5.16%.

According to Frank Nothaft, chief economist at Freddie Mac, the rise in mortgage rates from lows hit two weeks ago had dampened a spurt in refinancing. The Mortgage Bankers Association reported that loan applications dropped 23% last week.

The mortgage rates exclude add-on fees known as points. The nationwide fee for 30-year, 15-year and five-year mortgages averaged 0.6 point. The average fee for one-year adjustable-rate mortgages was 0.5 point. In addition, a year ago, the nationwide average rate on 30-year mortgages stood at 6.37%, 15-year mortgage rates averaged 6.03%, five-year adjustable-rate mortgages were at 6.11%, and one-year adjustable-rate mortgages stood at 5.58%.

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