Long-Term Mortgage Rates EdgeLower
McLEAN, Va. - (02/04/05) -- Long-term mortgage rates declinedslightly this week, for the fifth week in a row, but shorter-termrates moved slightly higher, in expectation of this week's Fedaction to hike short-term rate, according to Freddie Mac. Theaverage for the benchmark 30-year, fixed-rate loan moved down to5.63% this week, from 5.66% last week; while the average for the15-year, fixed-rate mortgage held steady at 5.14%. Meantime, theaverage for one-year ARMs rose to 4.23%, from 4.15%; while thefive-year ARM average dipped to 5%, from 5.02%. Frank Nothaft,chief economist for the secondary mortgage market giant, predictedsteady rates for much of the year. "We continue to expect rateswill not rise very much this year and that the economy will grow ata sustainable pace." said Nothaft. "This should translate into acontinued good atmosphere for housing." Nothaft said the increasein one-year ARM rates was influenced by the Fed's widelyanticipated decision on Wednesday to raise the target rate forovernight Fed Funds by 25 basis points to 2.5%. "We will probablysee the ARM rise a little more over the next few weeks inanticipation of further rate increases by the Fed while thelong-term fixed rates remain fairly flat," he said.