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Mortgage Rates Move Up This Week

August 1, 2002

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WASHINGTON (AP) _ Mortgage rates moved higher this week, according to a nationwide survey released Thursday, after rates on 30-year mortgages dipped last week to the lowest level in 31 years of record keeping.

Freddie Mac, the mortgage company, reported that the average interest rate on a 30-year fixed-rate mortgage climbed to 6.43 percent this week, up from 6.34 percent the previous week.

Last week’s rate marked the lowest level on 30-year mortgages since Freddie Mac began conducting its nationwide survey in 1971. The previous low was 6.45 percent, a level reached in early November.

A year ago this time, 30-year mortgages averaged 7 percent.

Even with this week’s increases, mortgage rates are low, something that is keeping the housing market stable and leading to brisk mortgage refinancing activity, economists say.

The average interest rate on 15-year mortgages, a popular option for refinancing, rose to 5.84 percent this week. That compared with last week’s rate of 5.76 percent, which was the lowest level since Freddie Mac began tracking these rates in 1991. A year ago, 15-year mortgages averaged 6.54 percent.

On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 4.45 percent, down from 4.31 percent the previous week. Last year this time, one-year ARMs averaged 5.77 percent.

These rates do not include add-on fees known as points. Each loan type carried an average 0.6 point this week.

``As the stock market rallied this week, investors pulled some money out of Treasuries, pushing up bond yields. This resulted in slightly higher interest rates,″ said Frank Nothaft, Freddie Mac’s chief economist. Market volatility, however, is making it difficult to predict where mortgage rates will head, he said.

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