Mortgage rates up slightly, still near record lows

WASHINGTON -- Rates for 30-year home loans edged up this week, but remain close to record lows reached over the spring.

The average rate for a 30-year fixed mortgage was 5.14%, up from 5.12% a week earlier, mortgage company Freddie Mac said Thursday. Rates, while above the record low of 4.78% hit in the spring, are still at attractive levels for people looking to buy a home or refinance.

"Long-term mortgage rates were barely changed this week, remaining historically low, which is helping to sustain a high level of affordability in the home-purchase market," Frank Nothaft, Freddie Mac's chief economist, said in a statement.

To revive the economy, the Federal Reserve has spent more than $600 billion out of a promised $1.25 trillion in mortgage-backed securities, which has driven down rates on home loans. It has also left a key interest rate near zero.

Now that the economy is on the mend, Fed policymakers must decide how and when to withdraw that support. Some analysts think it could take four or five years for the Fed to pull back entirely and shrink a balance sheet that is now about $2 trillion, more than double what it was when the financial crisis struck.

Despite government efforts to prop up the mortgage market, qualifying for a loan is still tough. Lenders have tightened their standards dramatically over the past year, so the best rates are available to those with solid credit.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.

The average rate on a 15-year fixed-rate mortgage rose to 4.58%, from 4.56% last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.67%, down from 4.57% a week earlier. Rates on one-year, adjustable-rate mortgages were unchanged at 4.69%.

The rates do not include add-on fees known as points. The nationwide fee for all loans in Freddie Mac's survey averaged 0.7 point for 30-year and 15-year loans, and 0.6 point for five-year and one-year loans.