WASHINGTON -- Rates on 30-year mortgages climbed this week to their highest point in eight months, hovering just above the 6 percent mark.
In its weekly nationwide survey, mortgage giant Freddie Mac reported Thursday that rates on 30-year, fixed-rate mortgages averaged 6.04 percent, up from 6.01 percent last week.
This week's rate was the highest since 30-year mortgages averaged 6.21 percent last July. The latest increase, the seventh consecutive weekly rise, was attributed to new inflation worries.
"Financial markets currently are very inflation sensitive, putting upward pressure on mortgage rates," said Frank Nothaft, Freddie Mac's chief economist. Last week, the Federal Reserve spurred new inflation concerns when it noted, in announcing its seventh boost in short-term rates, that price pressures had picked up in recent months.
While 30-year mortgages have jumped by nearly one-half percentage point since hitting a low for this year of 5.57 percent in early February, Nothaft predicted future increases will be at a moderate pace.
"Looking ahead into the spring home buying season, we don't expect mortgage rates to rise too much or too quickly in the near term," he said. "Housing activity should stay on track for a strong 2005."
Rates on 15-year, fixed-rate mortgages, a popular option for refinancing, rose to 5.58 percent this week, up from 5.56 percent last week.
Rates on one-year adjustable-rate mortgages increased to 4.33 percent this week, compared with 4.24 percent last week.
Five-year hybrid adjustable rate mortgages averaged 5.43 percent this week, up from 5.35 percent last week. These hybrid mortgages have a fixed-rate for five years and then adjust each year after that.
The nationwide averages for mortgage rates do not include add-on fees known as points. Thirty-year mortgages, 15-year mortgages and five-year ARM each carried a fee of 0.7 point. The one-year ARM had a financing fee of 0.8 point.
A year ago, 30-year mortgages averaged 5.52 percent, 15-year mortgages were at 4.84 percent and one-year ARMs averaged 3.46 percent. Freddie Mac does not have historical data on the five-year ARM which it began tracking this year.