30-Year Mortgage Rates Edge Up to 6.79%

Interest rates on 30-year mortgages edged up slightly last week as fears about the Federal Reserve's next rate moves lessened a bit.

Freddie Mac, the mortgage company, reported Thursday that rates on 30-year fixed-rate mortgages increased to a nationwide average of 6.79 percent this week, from 6.78 percent last week.

It was the fourth straight weekly increase, and it put rates at the highest level for 30-year mortgages since the week of May 24, 2002.

Housing sales, which have set records for five straight years, are expected to decline by about 7 percent this year as higher mortgage rates make homeownership more expensive.

The Fed last week raised a key interest rate for a 17th consecutive time, but in its statement explaining the action it said future changes would be driven by incoming economic data. That eased worries in the financial markets that the central bank could overdo the tightening and raise the risks of a recession.

Frank E. Nothaft, chief economist at Freddie Mac, said he was still looking for only a gradual rise in mortgage rates this year as long as the Fed does not become overly worried about inflation.

"The interest rate for the 30-year fixed-rate mortgage will gradually drift upward, but should remain under 7 percent for the year," he said.

Rates also rose slightly for other types of mortgages this week, according to the Freddie Mac survey.

Rates on 15-year fixed-rate mortgages, a popular choice for refinancing, increased to 6.44 percent, from 6.43 percent last week.

Rates on one-year adjustable-rate mortgages rose to 5.83 percent, from 5.82 percent last week and the highest level in more than five years.

Rates on five-year adjustable-rate mortgages were unchanged at 6.39 percent.

The mortgage rates do not include add-on fees known as points. The 30-year and 15-year mortgages carried a nationwide average fee of 0.5 point. The five-year ARM had a nationwide average fee of 0.6 point, and the one-year ARM carried a fee of 0.8 point.

A year ago, 30-year mortgages averaged 5.62 percent; 15-year mortgages stood at 5.20 percent; one-year ARMs were at 4.33 percent; and five-year ARMs averaged 5.19 percent.