Mortgage Rates Increased Again In Latest Month --- Fourth Rise in a Row Brings Quote to 14.5%, Highest Level Since October '82
WASHINGTON -- Mortgage interest rates rose during the past month for the fourth consecutive month, but some analysts predicted the sales-damping rates soon may reach a plateau.</br></br>Lenders last week were quoting an average interest rate of 14.5% on conventional fixed-rate mortgages, according to the Federal Home Loan Mortgage Corp. That was up from 14.08% a month earlier and was the highest since the 14.6% rate for the week of Oct. 15, 1982. The rate was more than 1 1/2 percentage points above the average rate of 12.96% a year earlier.</br></br>Last year's highest rate was 13.89% in the Aug. 19 week. Mortgage interest rates gradually fell after that, bottoming at 13.19% before starting to climb again in late February.</br></br>The basic weekly figures released by Freddie Mac, as the agency is called, refer to 30-year conventional loans for 80% of the purchase price of a new single-family house; they don't include certain initial fees amortized over 10 years. Conventional loans are those that aren't backed by the government.</br></br>Both sales and starts of new housing have been hurt recently by the rising interest rates. New home sales fell an adjusted 4.4% in May, the third consecutive monthly decline. Housing starts dropped 10.5% to a 1,782,000-unit annual rate in May. "The housing recovery? We can play taps for 1984," said Mark Reidy, executive vice president of the Mortgage Bankers Association of America.