Mortgage rates rise to November levels

Mortgage rates rise to November levels

	Published : Thu, 18 Jan 2007 18:49 By : Agencies Print this Story

WASHINGTON (AFX) - Rates on 30-year mortgages rose this week to the highest level in nine weeks as financial markets reacted to a series of more upbeat financial reports.

Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.23 percent this week, up from 6.21 percent last week. It was the highest level since 30-year mortgages stood at 6.24 percent the week of Nov. 16.

Analysts said that financial markets were reacting to various economic reports showing that the economy was doing better at the end of the year than had been expected, lowering chances that the Federal Reserve will move any time soon to cut interest rates.

'Interest rates drifted slightly higher following the latest positive economic reports,' said Frank Nothaft, chief economist for Freddie Mac. 'Shoppers bustling through the holiday season boosted December's retail sales above consensus expectations. In the same month, industrial production reversed a three-month decline and rose faster than had been anticipated.'

The Commerce Department reported Thursday that home construction rose by 4.5 percent in December to a seasonally adjusted annual rate of 1.642 million units. It was the second consecutive monthly gain and a possible sign that the steep slump in housing may be coming to an end.

However, analysts cautioned against reading too much into the figure given that it was influenced by unusually warm weather in December.

The Freddie Mac survey showed that other types of mortgage rates experienced slight increases this week.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, edged up to 5.98 percent, compared to 5.96 percent last week.

Five-year adjustable rate mortgages rose to 6.04 percent, up from 6.03 percent. One-year ARMs rose to 5.51 percent, up from 5.44 percent last week.

The mortgage rates do not include add-on fees known as points. Thirty-year, 15-year and five-year mortgages each carried a nationwide average fee of 0.4 point. One-year adjustable rate mortgages carried a fee of 0.5 point.

A year ago, rates on 30-year mortgages stood at 6.10 percent while 15-year mortgages were at 5.67 percent, five-year ARMs averaged 5.75 percent and one-year ARMs were at 5.18 percent.