30-year mortgages highest since October

Rates on 30-year mortgages hit the highest level since late October following release of more economic data showing a rebounding economy.

Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.34 percent this week, up from 6.25 percent last week. It was the fourth consecutive weekly increase and pushed these mortgages to the highest level since they were at 6.40 percent the week of Oct. 26.

Analysts said financial markets were reacting to a string of better-than-expected economic reports showing the economy was rebounding at the end of 2006.

The government reported this week that overall economic growth, as measured by the gross domestic product, rose at a solid 3.5 percent annual rate in the final three months of last year, up sharply from the lackluster 2 percent GDP rate of the July-September quarter.

"Interest rates moved higher following the latest upbeat economic news," said Frank Nothaft, chief economist at Freddie Mac.

The Freddie Mac survey showed that other types of mortgage rates also moved higher this week.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, rose to 6.06 percent, up from 5.98 percent last week.

Five-year adjustable rate mortgages rose to 6.04 percent, up from 6 percent last week while one-year ARMs climbed to 5.54 percent, up from 5.49 percent last week.

The mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried a nationwide average fee of 0.4 point. Five-year mortgages carried an average fee of 0.6 point while one-year mortgages carried a fee of 0.7 point.

A year ago, rates on 30-year mortgages stood at 6.23 percent while 15-year mortgages were at 5.81 percent, five-year adjustable rate mortgages averaged 5.87 percent and one-year ARMs were at 5.33 percent.

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Freddie Mac: http://www.freddiemac.com