Mortgage Rates Continue to Rise

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Average interest rates on U.S. 30-year and 15-year fixed-rate mortgages continued crawling upward in the latest week, according to a survey released by mortgage finance company Freddie Mac (FRE) Thursday.

Rates on 30-year mortgages rose to an average 6.79 percent from 6.78 percent last week, the highest level since May 2002, Freddie Mac said.

Fifteen-year mortgages inched up to an average 6.44 percent from 6.43 percent, the highest since 6.49 percent in April 2002.

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One-year adjustable-rate mortgages also inched up higher, to 5.83 percent from 5.82 percent.

"Since last week's rate increase by the Federal Reserve came as no great surprise, mortgage rates remained nearly unchanged from the previous week," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement. "This is fairly consistent with our economic outlook, which continues to forecast that the interest rate for the 30-year fixed-rate mortgage will gradually drift upward but should remain under 7 percent for the year."

Last week, the Fed raised interest rates by a quarter percentage point for the 17th straight time, from 5 percent to 5.25 percent.

Even though the housing market boom has begun to slow due to rising mortgage rates, the number of homes being sold in May increased unexpectedly, the National Association of Realtors trade group said Thursday. Pending home sales, where a contract has been signed but the sale has not closed, rose 1.3 percent in May, the group said.

Lenders charged an average of 0.5 percent in fees and points on 30- and 15-year mortgages and 0.8 percent on the one-year ARM, all unchanged from last week.

The hybrid "5/1" ARM, set at a fixed rate for five years, then adjustable each year following, averaged 6.39 percent, the same as last week.

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

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