Mortgage interest rates increase again
BY JEANNINE AVERSA
ASSOCIATED PRESS
WASHINGTON -- Rates on 30-year mortgages marched up this week to their highest point in nearly four years, a factor that is taking some oomph out of the housing market.
Freddie Mac, the mortgage company, reported Thursday that for the week ending April 20, rates on 30-year, fixed-rate mortgages averaged 6.53%, up from 6.49% last week.
This week's rate was the highest since the week ending July 12, 2002, when 30-year mortgage rates stood at 6.54%.
Mortgage rates rose as Wall Street investors fretted that inflation might pick up, analysts said. The worries were fanned by government reports released earlier this week showing big increases in both wholesale and consumer prices for March.
Rising mortgages rates are affecting home sales and residential construction.
"As a result of higher mortgage rates, housing market activity is beginning to slow," said Frank Nothaft, Freddie Mac's chief economist.
The housing sector racked up record-high sales five years running. Sales, however, are expected to drop this year. And, home prices, which have posted double-digit gains in past years, aren't expected to go up nearly as much this year.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, climbed to 6.17% this week, from 6.14% last week.
One-year adjustable rate mortgages increased to 5.63% this week, up from last week's 5.61%.
Rates on 5-year, hybrid adjustable-rate mortgages averaged 6.16% this week, up from 6.13% last week.
The mortgage rates do not include add-on fees known as points.
Thirty-year mortgages carried an average nationwide fee of 0.6 point. Fifteen-year mortgages had a fee of 0.5 point, 1-year ARMs carried a fee of 0.9 point and 5-year ARMs had a fee of 0.8 point.
A year ago, 30-year mortgages averaged 5.80%, 15-year mortgages stood at 5.36%, 1-year ARMs were at 4.26% and 5-year ARMs averaged 5.22%.
In other real estate news, mortgage applications in the United States fell for a second week.
The Mortgage Bankers Association's index of applications to buy a home or refinance an existing loan dropped 1.7% to 569.6 from 579.4 a week earlier. The gauge of applications to purchase homes declined 2.5% to 407.4.
The mortgage banker's refinancing index fell 0.4% last week to 1,526.1, the second-lowest level this year. The share of applications that were for refinancing fell to 36.4%, from 37.3%.
"Mortgage volumes are declining slightly, but not precipitously," National City Corp. Chief Executive Officer David Daberko said in an interview this week.
National City, Ohio's largest bank and a major player in Michigan, said that reduced mortgage demand helped drag profit down for a third straight quarter. Profit from the company's mortgage lending business plunged 77% to $56 million in the first quarter.
"Economic growth and job creation are providing a favorable backdrop for the housing market, but rising interest rates have an offsetting effect," National Association of Realtors economist David Lereah.
ASSOCIATED PRESS
WASHINGTON -- Rates on 30-year mortgages marched up this week to their highest point in nearly four years, a factor that is taking some oomph out of the housing market.
Freddie Mac, the mortgage company, reported Thursday that for the week ending April 20, rates on 30-year, fixed-rate mortgages averaged 6.53%, up from 6.49% last week.
This week's rate was the highest since the week ending July 12, 2002, when 30-year mortgage rates stood at 6.54%.
Mortgage rates rose as Wall Street investors fretted that inflation might pick up, analysts said. The worries were fanned by government reports released earlier this week showing big increases in both wholesale and consumer prices for March.
Rising mortgages rates are affecting home sales and residential construction.
"As a result of higher mortgage rates, housing market activity is beginning to slow," said Frank Nothaft, Freddie Mac's chief economist.
The housing sector racked up record-high sales five years running. Sales, however, are expected to drop this year. And, home prices, which have posted double-digit gains in past years, aren't expected to go up nearly as much this year.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, climbed to 6.17% this week, from 6.14% last week.
One-year adjustable rate mortgages increased to 5.63% this week, up from last week's 5.61%.
Rates on 5-year, hybrid adjustable-rate mortgages averaged 6.16% this week, up from 6.13% last week.
The mortgage rates do not include add-on fees known as points.
Thirty-year mortgages carried an average nationwide fee of 0.6 point. Fifteen-year mortgages had a fee of 0.5 point, 1-year ARMs carried a fee of 0.9 point and 5-year ARMs had a fee of 0.8 point.
A year ago, 30-year mortgages averaged 5.80%, 15-year mortgages stood at 5.36%, 1-year ARMs were at 4.26% and 5-year ARMs averaged 5.22%.
In other real estate news, mortgage applications in the United States fell for a second week.
The Mortgage Bankers Association's index of applications to buy a home or refinance an existing loan dropped 1.7% to 569.6 from 579.4 a week earlier. The gauge of applications to purchase homes declined 2.5% to 407.4.
The mortgage banker's refinancing index fell 0.4% last week to 1,526.1, the second-lowest level this year. The share of applications that were for refinancing fell to 36.4%, from 37.3%.
"Mortgage volumes are declining slightly, but not precipitously," National City Corp. Chief Executive Officer David Daberko said in an interview this week.
National City, Ohio's largest bank and a major player in Michigan, said that reduced mortgage demand helped drag profit down for a third straight quarter. Profit from the company's mortgage lending business plunged 77% to $56 million in the first quarter.
"Economic growth and job creation are providing a favorable backdrop for the housing market, but rising interest rates have an offsetting effect," National Association of Realtors economist David Lereah.
