WASHINGTON (AP) _ Rates on 30-year mortgages topped 6 percent for the first time in six weeks as financial markets grew more worried about rising inflation pressures.
Freddie Mac, the mortgage company, reported Thursday that 30-year fixed-rate mortgages averaged 6.03 percent this week after three straight weeks at 5.88 percent. Rates on 30-year mortgages were last above 6 percent the week of March 16 when they averaged 6.13 percent.
"Average rates on mortgages increased across the board this last week as the most recent economic data raised inflationary concerns in the capital markets," said Frank Nothaft, Freddie Mac's chief economist.
Fueling those concerns was a bigger-than-expected 1.1 percent jump in wholesale prices and a renewed surge in energy costs, which have pushed gasoline and crude oil prices to record levels.
The Federal Reserve has been aggressively cutting interest rates to combat an economic slowdown that many economists believe has turned into a recession. However, analysts said that the Fed is likely to scale back its rate cuts to a quarter-point move at next week's meeting as a way of signaling that it is also concerned about the threat of inflation.
Bill Hampel, chief economist for the Credit Union National Association, said while interest rates rose this week they still remain at historically favorable levels. He said that the bigger problem for the housing industry at the moment is the fact that many lenders have tightened up on credit standards in reaction to rising mortgage defaults, making it harder for prospective buyers to qualify for loans.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, rose this week to 5.62 percent, up from 5.40 percent last week.
Five-year adjustable-rate mortgages rose to 5.68 percent, up from 5.48 percent last week. One-year adjustable-rate mortgages rose to 5.28 percent compared with 5.10 percent last week.
The mortgage rates do not include add-on fees known as points. For 30-year and 15-year mortgages, the nationwide average fee was 0.3 point while the average fee was 0.5 point for 5-year and one-year mortgages.
A year ago, rates on 30-year mortgages stood at 6.16 percent, 15-year mortgage rates averaged 5.87 percent, five-year adjustable-rate mortgages were 5.88 percent and one-year adjustable-rate mortgages were at 5.43 percent.
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Freddie Mac: http://www.freddiemac.com
Copyright 2008 The Associated Press.