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Mortgages > Purchase
Rates on 30-year mortgages fall for fifth straight week
MARTIN CRUTSINGER, AP Economics Writer. Associated Press. New York: Feb 3, 2005. pg. 1
Copyright Associated Press Feb 3, 2005.
WASHINGTON (AP) _ Rates on 30-year mortgages fell for a fifth straight week, but other shorter-term rates edged up a bit, influenced by the Federal Reserve's decision to raise a key rate it controls for the sixth time since last June.
Freddie Mac's weekly survey of mortgage rates released Thursday showed that rates on 30-year, fixed rate mortgages averaged 5.63 percent for the week ending Feb. 3, down from 5.66 percent last week.
Low mortgage rates powered sales of both new and existing homes to all-time highs in 2004, the fourth straight year that sales in both categories have set records.
Analysts are forecasting housing will enjoy another good year in 2005 with sales dipping by around 3 percent, a decline that would still give the country the second-highest levels for sales of new and existing homes.
"We continue to expect rates will not rise very much this year and that the economy will grow at a sustainable pace," said Frank Nothaft, chief economist for Freddie Mac. "This should translate into a continued good atmosphere for housing."
Rates on 15-year, fixed-rate mortgages, a popular option for refinancing, remained unchanged at 5.14 percent. Rates on one-year adjustable-rate mortgages were 4.23 percent, up slightly from 4.18 percent last week.
Nothaft said that the increase in one-year ARMs was influenced by the Fed's widely anticipated decision on Wednesday to boost a key short-term interest rate for the sixth time since the Fed began raising interest rates last June.
"We will probably see the ARM rise a little more over the next few weeks in anticipation of further rate increases by the Fed while the long-term fixed rates remain fairly flat," Nothaft said.
Five-year hybrid adjustable rate mortgages averaged 5.00 percent this week, down from 5.02 percent last week. These hybrid mortgages have a fixed-rate for five years and then adjust each year after that.
The nationwide averages for mortgage rates do not include add-on fees known as points. The thirty-year, 15-year mortgages and one- year mortgages each carried a 0.7 point fee. The five-year ARM carried a fee of 0.6 point.
A year ago, rates on 30-year mortgages averaged 5.72 percent with 15-year mortgages at 5.03 percent and one-year ARMs at 4.18 percent. There isn't a figure for five-year ARMs because Freddie Mac just began tracking those rates this year.
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 394
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• Mortgages > Purchase Articles Archive
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