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30-year mortgages rise to 6.73%, nearly
reach yearly high
Associated Press
WASHINGTON // Rates on 30-year mortgages rose this week
to the second-highest level of the year as financial
markets reacted to stronger economic news.
Freddie Mac's national survey reported that 30-year
fixed-rate mortgages averaged 6.73 percent for the week
that ended yesterday. That was up from 6.63 percent for
the week that ended July 5 and was very close to the
high of the year of 6.74 percent for the week of June
14. Rates had edged down slightly since the high.
The increase in the average rate this week likely
reflected a series of reports showing strong economic
growth, including a jobless rate that held steady
at 4.5 percent in June.
"A favorable employment report for June and robust
consumer credit growth for May pushed long-term mortgage
rates higher in the past week, nearly eliminating the
declines made in rates over the previous three weeks," said
Frank E. Nothaft, chief economist for Freddie Mac, the
government-sponsored mortgage giant.
Nothaft predicted that 30-year mortgages are likely
to stay near the current level for the rest of the year.
At their last meeting June 27-28, Federal Reserve policymakers
decided to hold a key interest rate unchanged, while
noting that some readings on core inflation had improved.
Many economists believe the Fed, which last changed its
key lending rate a year ago, will keep the rate on hold
for the rest of this year and into 2008.
According to the Freddie Mac survey, rates on 15-year
fixed-rate mortgages, a popular choice for refinancing,
rose to 6.39 percent this week, up from 6.3 percent last
week.
Rates on five-year adjustable-rate mortgages (ARMs)
averaged 6.35 percent this week, up from 6.29 percent.
Rates on one-year adjustable-rate mortgages remained
at 5.71 percent this week, unchanged from last week.
The mortgage rates do not include add-on fees known
as points. Both 30-year and 15-year mortgages carried
a nationwide average fee of 0.4 point while five-year
ARMs and one-year ARMs both carried an average fee of
0.5 point.
A year ago, rates on 30-year mortgages stood at 6.74
percent; 15-year mortgages were at 6.37 percent; five-year
adjustable-rate mortgages averaged 6.33 percent, and
one-year ARMs were at 5.75 percent.
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