From News Services and Staff Reports
Saturday, January 20, 2007

Rates on 30-year mortgages rose this week to the highest level in nine weeks as financial markets reacted to a series of more upbeat economic reports.

Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.23 percent this week, up from 6.21 percent last week. It was the highest level since 30-year mortgages stood at 6.24 percent the week of Nov. 16.

Analysts said that financial markets were reacting to reports showing that the economy was doing better at the end of the year than had been expected, lowering chances that the Federal Reserve will move any time soon to cut interest rates.

"Interest rates drifted slightly higher following the latest positive economic reports," said Frank Nothaft, chief economist for Freddie Mac. "Shoppers bustling through the holiday season boosted December's retail sales above consensus expectations. In the same month, industrial production reversed a three-month decline and rose faster than had been anticipated."

The Commerce Department reported Thursday that home construction rose by 4.5 percent in December to a seasonally adjusted annual rate of 1.642 million units. It was the second consecutive monthly gain and a possible sign that the steep slump in housing may be coming to an end.

However, analysts cautioned against reading too much into the figure, given that it was influenced by unusually warm weather in December.

The Freddie Mac survey showed that various types of mortgage rates experienced slight increases this week. Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, edged up to 5.98 percent, compared with 5.96 percent last week. Five-year adjustable-rate mortgages rose to 6.04 percent, up from 6.03 percent. One-year ARMs rose to 5.51 percent, from 5.44 percent last week. The mortgage rates do not include add-on fees known as points. Thirty-year, 15-year and five-year mortgages each carried a nationwide average fee of 0.4 point. One-year adjustable-rate mortgages carried a fee of 0.5 point. A year ago, rates on 30-year mortgages stood at 6.10 percent while 15-year mortgages were at 5.67 percent, five-year ARMs averaged 5.75 percent and one-year ARMs 5.18 percent.

ENDANGERED PLACES . . . The D.C. Preservation League is soliciting nominations for its annual list of the most endangered places in Washington. The league says that sites will be picked "based on the severity of the threat of destruction to the buildings and landscapes in question, whether through demolition, neglect, or inappropriate alteration." Nomination forms are on the group's Web site, http://www.dcpreservation.org/, and must be postmarked no later then 5 p.m. March 2. For more information, call 202-783-5144.

RADON TESTS . . . The District of Columbia's Department of the Environment is offering city residents free radon test kits. Radon is an invisible, odorless substance that has been linked to health problems. For more information and the free test kit, call 202-535-2302 or see http://ddoe.dc.gov/.

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