2004 Ranks as 2nd-lowest year for Mortgage Rates

Mortgage rates around the country moved up last week, but for all of 2004, rates on 30-year mortgages registered their second-lowest year on record.

Freddie Mac's weekly survey, released Wednesday, showed that rates on 30-year, fixed-rate mortgages increased to 5.81 percent last week, compared with 5.75 percent the previous week.

For the entire year, rates on benchmark 30-year mortgages averaged 5.84 percent, second only to last year's 5.83 percent, the lowest annual rate in Freddie Mac's record keeping, a mortgage company spokeswoman said. The rate came in under 6 percent for the last 22 weeks of the year.

Long-term mortgage rates remained well behaved even as the Federal Reserve boosted short-term interest rates five times this year. That's because inflation, while creeping higher, is not viewed as a danger to the economy, analysts said.

Low mortgage rates powered homes sales and they're expected to end at record highs for all of 2004, analysts said.

Some analysts believe rates on 30-year mortgages could climb to around 6.5 percent by the end of next year. That still would be considered low by historical standards. A few think rates could hit 7 percent next year.

Rates on 15-year, fixed-rate mortgages, a popular option for refinancing, rose to 5.23 percent last week, compared with 5.18 percent the week before.

Rates on one-year, adjustable-rate mortgages increased from 4.17 percent to 4.19 percent.

The nationwide averages for mortgage rates last week do not include add-on fees known as points. Each loan type carried a 0.6-point fee.

A year ago, rates on 30-year mortgages averaged 5.85 percent; 15-year mortgages were at 5.15 percent, and one-year ARMs averaged 3.72 percent.

The Mortgage Bankers Association reported that refinancing accounted for 46.2-percent of all mortgage applications filed last week, down from 48.9 percent.