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Mortgage Rates Rise

December 20, 2001

WASHINGTON (AP) _ Mortgage rates rose this week, with rates for 30-year mortgages hitting their highest level in five months.

The average interest rate on 30-year fixed-rate mortgages advanced to 7.17 percent, up from 7.09 percent last week, according to a nationwide survey released Thursday by Freddie Mac, the mortgage company.

This week’s rate was the highest since the week ending July 13, when 30-year mortgages averaged 7.21 percent.

Rates on 30-year mortgages fell to 6.45 percent in early November, the lowest level since Freddie Mac began conducting its nationwide survey in 1971. But since then rates have generally been rising as the bond market detected signs that the recession might be bottoming out.

Still, Frank Northaft, Freddie Mac’s chief economist, said even with the increases rates remain low, something that is helping to keep the housing market stable.

``Mortgage rates are still very reasonable and housing continues to be an attaractive investment,″ he said.

Fifteen-year mortgages, a popular option for refinancing, rose to 6.65 percent this week from 6.57 percent the week before.

A year ago, rates for 30-year mortgages averaged 7.17 percent and rates for 15-year mortgages averaged 6.84 percent.

On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 5.27 percent, down slightly from 5.19 percent the previous week. Last year at this time, ARMs stood at 7.02 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.

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