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Mortgage Rates Hit 7-Month High

By Reuters
Published | Updated

WASHINGTON – U.S. interest rates on 30- and 15-year mortgages rose to their highest levels in seven months, according to a report issued Thursday by mortgage finance company Freddie Mac (FRE).

U.S. 30-year mortgage rates rose to an average of 5.95 percent in the week ended March 17 from 5.85 percent a week earlier. It was the highest level for 30-year mortgage rates (search) since they hit 5.99 percent in the week ended Aug. 5, 2004.

Fifteen-year mortgage rates also rose in the week to an average of 5.47 percent from 5.38 percent, the highest since 5.49 percent in the July 29, 2004 week.

Rates on one-year adjustable rate mortgages (search) (ARM) fell to 4.20 percent from 4.24 percent last week.

A year ago, 30-year mortgage rates averaged 5.38 percent, 15-year mortgage rates 4.69 percent and ARM rates 3.39 percent.

Freddie Mac also said rates on the hybrid "5/1" ARM, set at a fixed rate for five years, then adjustable each year following, averaged 5.31 percent, up from 5.22 percent last week.

"The 30-year mortgage rate in February was uncommonly low and the weather tame across much of the country. That combination pushed housing starts in February to a 21-year high," Amy Crews Cutts, Freddie Mac deputy chief economist, said in a statement.

"But we will probably see some moderation in the housing sector as mortgage rates slowly rise in coming months."

A Commerce Department (search) report on Wednesday showed groundbreaking for new homes climbed 0.5 percent to a seasonally adjusted annual rate of 2.195 million units last month, the fastest clip since February 1984.

Housing has continued buoyant, kept aloft by long-term interest rates that have stayed relatively low in the face of a half-dozen rises in short-term rates by the Federal Reserve.

Freddie Mac said lenders charged an average of 0.7 percent in fees and points on 30-year mortgages, up from 0.6 percent last week. They charged 0.7 percent on 15-year mortgages, up from 0.6 percent last week, and 0.8 percent on the one-year ARM, up from the prior week's 0.7 percent.

Freddie Mac is a mortgage finance company chartered by Congress that buys mortgages from lenders and packages them into securities for investors or holds them in its own portfolio.