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Rates for 30-Year Mortgages Rise

January 24, 2002

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WASHINGTON (AP) _ Rates on 30-year mortgages remained below 7 percent for a second straight week even though rates at all loan lengths showed a slight increase.

The average interest rate on 30-year fixed-rate mortgages climbed to 6.96 percent from 6.83 percent the previous week, according to a nationwide survey released by Freddie Mac, the mortgage company.

It was the first increase after four consecutive weekly declines had pushed 30-year mortgages below 7 percent for the first time since early December.

Rates on 30-year mortgages hit a low of 6.45 percent in early November, their lowest point since Freddie Mac began conducting its nationwide survey in 1971.

While rates have moved slightly higher since that time, analysts still view the current levels as extremely favorable for home buyers.

Frank Nothaft, Freddie Mac’s chief economist, said he was forecasting that 30-year rates will hover around 7 percent to 7.25 percent even as the economy stages an economic recovery from the recession.

``We fully expect the housing sector of the economy to continue to thrive in 2002,″ Nothaft said. ``We still don’t anticipate any sharp rise in mortgage rates in the coming months.″

Rates on 15-year mortgages, a popular option for refinancing, rose to 6.44 percent this week from 6.31 percent the week before.

A year ago, rates for 30-year mortgages averaged 7.15 percent and rates for 15-year mortgages averaged 6.70 percent.

On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 5.10 percent, up slightly from 5.08 percent the previous week. Last year at this time, ARMs stood at 6.64 percent.

These rates do not include add-on fees known as points, which averaged around 0.7 percent of the loan amount for all three types of mortgages last week.

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