The nationwide average for a 30-year mortgage rises for the fourth-straight week.

01:00 AM EDT on Monday, October 10, 2005

BY MARTIN CRUTSINGER
Associated Press

WASHINGTON -- Rates on 30-year mortgages rose for a fourth consecutive week last week, climbing to the highest level since late March, as financial markets continued to worry about inflation.

Mortgage giant Freddie Mac reported Thursday that the nationwide average for 30-year, fixed-rate mortgages rose to 5.98 percent, up from 5.91 percent the previous week. It was the highest level since rates rose the week of March 31 to 6.04 percent, which so far this year has been the highest nationwide average.

"Mortgage rates have been rising for the last four weeks on inflation jitters caused in part by extended higher energy prices," said Frank Nothaft, chief economist for Freddie Mac.

The Federal Reserve last month decided to raise a key short-term interest rate it controls for an 11th time, with Fed officials saying they are more worried about the inflation threat from surging energy prices than they are concerned that Hurricanes Katrina and Rita will have a lasting impact on economic growth.

Nothaft said he believed mortgage rates would continue to rise in coming months as the economy keeps growing but at "perhaps a slightly slower pace than in the recent past."

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, averaged 5.54 percent last week, up from 5.48 percent the previous week.

One-year adjustable rate mortgages rose to 4.77 percent, the highest level in more than three years, and up from 4.68 percent the previous week.

Rates on five-year hybrid adjustable-rate mortgages averaged 5.48 percent last week, up from 5.31 percent.

The nationwide averages for mortgage rates do not include add-on fees known as points. The 30-year and 15-year mortgages carried a nationwide average fee of 0.5 point, while the five-year and one-year ARMs carried a fee of 0.6 point.

A year ago, 30-year mortgages averaged 5.82 percent, 15-year mortgages were at 5.24 percent and one-year ARMs averaged 4.08 percent. Freddie Mac does not have historical data on the five-year ARM, which it began tracking this year.