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Mortgages > Purchase
Mortgage rates start the year with a decline
JEANNINE AVERSA, Associated Press Writer. Associated Press.
Copyright Associated Press
WASHINGTON (AP) _ Mortgage rates around the country moved lower this week, marking a good start to a new year of home buying.
Freddie Mac's weekly survey of mortgage rates released Thursday showed that rates on 30-year, fixed rate mortgages averaged 5.77 percent for the week ending Jan. 6. That was down from last week's 5.81 percent.
For all of 2004, rates on benchmark 30-year mortgages averaged 5.84 percent, second only to last year's 5.83 percent, the lowest annual rate in Freddie Mac's record keeping.
Low mortgage rates have powered home sales. Analysts believe sales hit a record high for all of 2004. The housing market is expected to post another good year in 2005, analysts said.
Long-term mortgage rates have remained well-behaved even as the Federal Reserve has boosted short-term interest rates five times in 2004. That's because inflation, while creeping higher, is not currently viewed as an immediate danger to the economy, analysts said.
"Economic news seems to reflect steady growth and low inflation, placing little upward pressure on interest rates," said Amy Crews Cutts, Freddie Mac's deputy chief economist.
"Although we expect mortgage rates will start to trend gently upward over the year, 30-year, fixed- rate mortgage rates should stay under 6 percent, at least through the first quarter," she said.
Some analysts believe rates on 30-year mortgages could climb to around 6.5 percent by the end of this year, which would still be considered low by historical standards. A few think rates could hit 7 percent.
Rates on 15-year, fixed-rate mortgages, a popular option for refinancing, dipped this week to 5.21 percent, from 5.23 percent last week. For one-year adjustable-rate mortgages, rates fell to 4.10 percent this week, from 4.19 percent.
Freddie Mac added another type of mortgage to its weekly survey: a five-year, "hybrid" adjustable- rate mortgage. It's fixed for five years and then adjusts each year thereafter. The rate on that mortgage averaged 5.03 percent this week.
The nationwide averages for mortgage rates this week do not include add-on fees known as points. The thirty-year and one-year adjustable mortgages each carried a 0.7 point fee. Fifteen-year mortgages carried a 0.6 point fee and five-year adjustables carried a 0.5 point fee.
A year ago, rates on 30-year mortgages averaged 5.87 percent with 15-year mortgages at 5.17 percent and one-year ARMs at 3.76 percent. There isn't a figure for five-year adjustables because Freddie Mac just began tracking those rates in its survey released Thursday.
On the Net: Freddie Mac: http://www.freddiemac.com
Reproduced with permission of the copyright owner. Further reproduction or distribution is prohibited without permission.
Companies: Freddie Mac (NAICS: 522291 )
Dateline: WASHINGTON
Text Word Count 415
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• Mortgages > Purchase Articles Archive
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