Friday, July 13, 2007

Mortgage rates at the second-highest level this year

30-year fixed-mortgage rates averaged 6.73% the week ending Thursday, a notch lower than this year’s high of 6.74% and up sharply from last week’s 6.63%. Analysts say that this is due to strong economic and employment data, but some publications suggest that employment data may be skewed by tricky calculations and adjustments. 15-year fixed-rate mortgages carried an average interest rate of 6.39% this week, up from 6.30 a week ago. Five-year adjustable-rate mortgages also increased, from last week’s 6.29% to 6.35 this week. One-year adjustable mortgages stood at 5.71, unchanged from last week.

A year ago, 30-year fixed-rate mortgages carried an interest of 6.74%, 15-year fixed home loans were at 6.37%, five-year adjustable-rate mortgages were at 6.33% and one-year adjustable mortgages averaged 5.75%.

Rates are expected to remain close to the current levels throughout the rest of the year, and the Fed is unlikely to cut the Fed Fund rate. Higher rates will have an adverse effect on the slumping housing market, which seems to already be affecting the financial markets at large and, according to this publication, newspapers and various types of smaller businesses as well.

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