NewswireToday - /newswire/ -
Fullerton, CA, United States, 2006/02/07 - Rates on 30-year mortgages, after falling for six straight weeks, edged up slightly this week as investors anticipated another rate hike from the Federal Reserve, according to a national survey released Thursday.
Mortgage giant Freddie Mac said its survey showed that rates on 30-year, fixed-rate mortgages rose to 6.12 percent, up from 6.10 percent last week.
Rates had been falling since mid-December, when the 30-year mortgage hit a high of 6.32 percent.
"The minuscule rise in mortgage rates this week most likely reflects market expectations that the Federal Reserve will once again raise rates next week," said Frank Nothaft, Freddie Mac's chief economist.
The Fed is widely expected at its meeting on Tuesday to boost a key interest rate for the 14th consecutive time. Many economists believe the central bank's credit-tightening campaign to keep inflation under control is drawing to an end with perhaps just one more rate hike after next week.
If the Fed does wrap up the rate increases at the March 28 meeting, then analysts said they expect 30-year mortgages to rise only gradually for the rest of the year, perhaps hitting 6.75 percent next December.
Other mortgage rates were up as well this week. Rates on 15-year fixed-rate mortgages, a popular choice for refinancing a home mortgage, averaged 5.7 percent, up from 5.67 percent last week.
One-year adjustable rate mortgages edged up to 5.2 percent, compared with 5.18 percent last week.
Rates on five-year hybrid adjustable-rate mortgages, however, were unchanged at 5.75 percent, the same level as last week.
The averages for mortgage rates do not include add-on fees known as points. The 30-year and 15-year mortgages carried a nationwide average fee of 0.5 point while the one-year and five-year adjustable-rate mortgages carried an average fee of 0.6 point.
A year ago, 30-year mortgages averaged 5.66 percent, 15-year mortgages stood at 5.14 percent, one-year ARMs were at 4.18 percent and five-year ARMs averaged 5.02 percent.