Mortgage Rates Up, but Still Under 5 Percent

Rates for 30-year home loans have inched up, but they remained below 5 percent for the third straight week as government efforts to aid the housing market continued to keep rates low.

The average rate on a 30-year fixed mortgage was 4.92 percent this week, up from 4.87 percent a week earlier, mortgage company Freddie Mac said Thursday. Rates, while above the record low of 4.78 percent hit in the spring, are still attractive for people looking to buy a home or refinance.

The average rate on a 15-year fixed-rate mortgage rose to 4.37 percent, from 4.33 percent last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.38 percent, up from 4.35 percent a week earlier. Rates on one-year, adjustable-rate mortgages inched up to 4.6 percent from 4.53 percent.

The rates do not include add-on fees known as points. The nationwide fee for loans in Freddie Mac's survey averaged 0.7 points for 30-year and 15-year loans. The fee averaged 0.6 points for five-year loans and 0.5 points for one-year loans.

Mortgage applications fell 5 percent in the week ended Oct. 9, and the refinancing gauge decreased 0.1 percent, according to the Mortgage Bankers Association.

To prop up the housing market and help the economy recover from the worst recession since the 1930s, the Federal Reserve has been engaged in an extraordinary level of support, spending $1.25 trillion on mortgage-backed securities, which has driven down rates on home loans.

Last month, Federal Reserve Chairman Ben S. Bernanke and his colleagues agreed to slow down the pace of the program to buy mortgage securities from Fannie Mae and Freddie Mac. Instead of wrapping up the purchases by the end of this year, the Fed now plans to do so by the end of March.

But minutes released this week of the Fed's closed-door deliberations on Sept. 22-23 revealed disagreement among Fed policymakers, though their vote to extend the program was unanimous. Some said a boost to the mortgage-securities-buying program could help the economy recover more quickly, while another member said a reduction was warranted because the recovery was showing signs of picking up.

Despite the government's effort to support the housing market, qualifying for a loan is still tough. Lenders have tightened their standards dramatically, so the best rates are available to those with solid credit and a 20 percent down payment.

Freddie Mac collects mortgage rates Monday through Wednesday of each week from lenders across the country. Rates often fluctuate significantly, even within a given day, often in line with long-term Treasury bonds.