Mortgage Rates Sharply Up in Week

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Mortgage rates around the country rose sharply this week, with rates on 30-year mortgages climbing to their highest level since late July.

The average interest rate on 30-year fixed-rate mortgages jumped to 7.02 percent from 6.75 percent last week, according to a nationwide survey released Thursday by Freddie Mac, the mortgage company.

The 7.02 percent rate was the highest since the week ending July 27 when 30-year rates averaged 7.03 percent.

Three weeks ago, 30-year mortgage rates fell to 6.45 percent, the lowest level since Freddie Mac began conducting its nationwide survey in 1971.

Fifteen-year mortgages, a popular option for refinancing, rose to 6.53 percent this week from 6.24 percent the week before. This week's rate was the highest level since Aug. 10 when 15-year rates averaged 6.54 percent.

A year ago, rates for 30-year mortgages averaged 7.65 percent and rates for 15-year mortgages averaged 7.35 percent.

On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 5.22 percent, up from 5.18 percent from the previous week. Last year at this time, ARMs stood at 7.24 percent.

These rates do not include add-on fees known as points, which averaged around 1 percent of the loan amount for all three types of mortgages.

Mortgage rates rose in response to some recent economic indicators suggesting that the recession may be shallow, said Freddie Mac's chief economist Robert Van Order. "Sentiment that the recession will not be as long or as deep as usual is putting upward pressure on mortgage rates," Van Order said.