Mortgage rates rise generally

ARMs dip

30-year loans average 5.85%

'We seem to be in another soft spot'

April 13, 2003|By BLOOMBERG NEWS

U.S. mortgage rates rose last week to about the average for this year, according to Freddie Mac, the No. 2 buyer of mortgages. Rates are expected to stay close to record lows amid economic weakness.

The average rate on a 30-year fixed mortgage increased to 5.85 percent for the week that ended Friday from 5.79 percent. That compares with a record-low 5.61 percent in mid-March and an average of 5.84 percent since the start of this year. During the corresponding period in 2002, the rate averaged 6.98 percent.

A weak economy is holding interest rates down, Freddie Mac said. Acceleration of the economy in the second half of this year probably won't be rapid enough to force mortgage rates to rise, according to Freddie Mac.

"We seem to be in another 'soft spot,'" said Frank Nothaft, the concern's chief economist. "Mortgage rates are expected to remain low and house-price growth will continue to moderate, keeping housing affordable to a broader segment of the population."

The average rate on a 15-year mortgage, a popular refinancing option, rose to 5.17 percent from 5.06 percent. The average rate on a one-year adjustable-rate mortgage slipped to 3.80 percent from 3.82 percent.

Last week's rate on a 30-year mortgage would put the average monthly payment on a $100,000 loan, including principal and interest with 1 point, at $589.94, down from $664.63 a year ago, when the rate was 6.99 percent.

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