Mortgage rates inch up

September 12, 2004|By BLOOMBERG NEWS

The average rate on a benchmark 30-year fixed mortgage rose to 5.83 percent in the U.S. last week, staying close to a five-month low, according to Freddie Mac, the second-biggest purchaser of home loans

The 30-year rate increased from 5.77 percent a week earlier, the lowest since 5.52 percent during the week that ended April 2. The one-year adjustable rate rose to 4 percent from 3.97 percent, the McLean, Va.-based company said in a statement.

Interest rates increased after the Labor Department reported this month that employers added 144,000 workers to payrolls last month, twice as many as in July. Thirty-year rates below 6 percent are underpinning the housing market.

"Low mortgage rates will sustain a brisk housing market, leading to record home sales," Frank Nothaft, Freddie Mac's chief economist, said in a statement.

Freddie Mac raised its estimate for 2004 home sales to 7.65 million last week. That would surpass the all-time high of 7.19 million last year. A month ago, Nothaft forecast sales of 7.54 million.

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