Thu Jul 1, 2004
WASHINGTON, July 1 (Reuters) - U.S. 30-year fixed rate mortgages dipped in the latest week, remaining at their lowest averages since early May following a rate increase by the Federal Reserve, mortgage finance company Freddie Mac said on Thursday.
Freddie Mac said 15-year mortgages also fell slightly in the week to an average of 5.62 percent from 5.64 percent the previous week.
But one-year adjustable rate mortgages inched upward to an average of 4.19 percent from 4.13 percent.
"As expected, long-term mortgage rates were relatively unaffected by the Fed's recent actions to preempt any future inflationary trend," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.
"And, as also expected, short-term mortgage rates moved upward in response to those same actions," he added.
The Fed raised U.S. interest rates for the first time in four years on Wednesday in the first of a likely series of increases to keep inflation at bay.
The decision by the U.S. central bank's policy-setting Federal Open Market Committee moved the benchmark federal funds rate, which affects credit costs throughout the economy, to 1.25 percent.
Wednesday's unanimous decision formally ends an easing cycle that began in 2001 and took the key rate to 1 percent, its lowest level since 1958.
"Although we anticipate a moderation in the housing sector at some future point, with the economy picking up steam and mortgage rates still low by historical standards, the housing market will remain buoyant for at least the rest of the year," Nothaft said.
Freddie Mac said lenders charged an average of 0.6 percent in fees and points on 30- and 15-year mortgages and 0.7 percent on the ARM, all unchanged from a week ago.
Freddie Mac is a mortgage finance company chartered by Congress that buys mortgages from lenders and packages them into securities for investors or holds them in its own portfolio.
This is not a commitment for a loan or an ad for credit as defined by paragraph 226.24 of regulation Z.