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Rates on 30-year mortgages edge up after 3 weeks of declines

WASHINGTON - Rates on 30-year mortgages edged up slightly this week after falling for three straight weeks.

Freddie Mac, the mortgage company, reported today that 30-year, fixed-rate mortgages averaged 6.62 percent. That was up from 6.59 percent last week, which had been the lowest level since early June.

This week's rate is the highest since 30-year mortgages averaged 6.73 percent four weeks ago, a level that was near the high for the year of 6.74 percent set in mid-June.

The small increase was influenced by developments in financial markets, particularly rates on 10-year Treasury securities, which have the biggest impact on mortgage rates. Analysts said the turmoil in subprime mortgages has not spilled over into the market for conventional loans.

"Problems in the non-prime mortgage markets where funds are expensive and hard to get have not affected the prime conforming market," said Frank Nothaft, chief economist at Freddie Mac.

Other types of mortgages also saw rate increases this week.

Rates on 15-year fixed-rate mortgages, a popular choice for refinancing, rose to 6.30 percent, up from 6.25 percent last week.

Rates on five-year adjustable-rate mortgages increased to 6.35 percent, up from 6.33 percent last week, while rates on one-year adjustable-rate mortgages increased to 5.67 percent, up from 5.65 percent.

The mortgage rates do not include add-on fees known as points. Thirty-year mortgages carried a nationwide average fee of 0.4 point while 15-year and five-year mortgages had a fee of 0.5 point. One-year ARMs carried an average fee of 0.6 point.

A year ago, rates on 30-year mortgages stood at 6.52 percent, 15-year mortgages were at 6.20 percent, five-year adjustable-rate mortgages averaged 6.18 percent and one-year ARMs were at 5.65 percent.

After a five-year boom, the housing market fell into a slump last year. The downturn has intensified this year as lenders have tightened standards in the wake of the problems with rising defaults on subprime mortgages, loans offered to borrowers with weak credit histories.

In the face of sluggish demand, builders have continued to slash construction. The Commerce Department reported Thursday that construction of new homes and apartments fell by 6.1 percent last month, compared to June, to a seasonally adjusted annual rate of 1.38 million units, the slowest pace in more than a decade.

Read more in later editions of The Blade and toledoblade.com

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