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Mortgages continue to rise
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February 17, 2000: 4:13 p.m. ET
Rates at their highest in over four years as lenders anticipate Fed move on rates
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NEW YORK (CNNfn) - Mortgages continue their steady rise and are at their highest point in more than four years, according to a survey released today by Freddie Mac.
The 30-year fixed rate mortgage averaged 8.38 percent for the week ending Feb. 18, up slightly from 8.36 a week ago. But that is well up from the rate on a 30-year fixed mortgage a year ago, when that mortgage averaged 6.82 percent. Rates for 30-year fixed mortgages are at their highest since July 1995.
Rates on 15-year fixed rate mortgages also rose, to 8.00 percent, up from 7.96 percent. A year ago they averaged 6.46 percent. One would have to go back to March 1995 to find a higher rate, Freddie Mac reported.
The 1-year adjustable-rate mortgage averaged 6.77 percent. That's also an increase from last week, when that kind of mortgage stood at 6.73 percent.
[Click here to see a breakdown of U.S. mortgage rates by region.]
"The market is convinced that the Federal Reserve will raise interest rates again," Freddie Mac Chief Economist Robert Van Order said in a release. "This has spooked the market driving up mortgage rates."
Van Order said that the bond market "is presently in a state of confusion" because it is looking for a slowdown in the economy but getting mixed signals. Given that confusion, it's hard to predict where interest rates are heading, he said.
"Suffice to say, though, that it is highly doubtful mortgage rates will change drastically in either direction," Van Order said.
Freddie Mac (FRE: Research, Estimates), or the Federal Home Mortgage Corp., is a Washington, D.C.-based public company. Congress set it up in 1970 to provide a flow of funds to mortgage lenders. It buys mortgages from banks, bundles them and sells them as mortgage-backed securities. 
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