30-year mortgages at 6.59%, approaching a 4-year high

The San Francisco Chronicle reports:

Mortgage rates climbed this week with 30-year fixed-rate mortgages hitting their highest point in almost four years, an increase that could dampen home sales and refinancing.

Rates for 30-year fixed-rate mortgages averaged 6.59 percent with an average 0.6 point for the week ended May 4, according to a survey by mortgage company Freddie Mac. That is up just slightly from last week's 6.58 percent average, but significantly above the 5.75 percent average of a year ago. The last time rates were higher was June 2002, when they averaged 6.63 percent.

"This is our sixth consecutive increase in mortgage rates, and I don't think we're finished with the increases quite yet," said Frank Nothaft, chief economist with Freddie Mac in McLean, Va.

The mortgage company predicts a 5 percent slowdown in home sales this year, and an equivalent slowdown in new home construction. Still, since that's coming off last year's record high, the coming year should still be relatively strong, he said. Home appreciation also will slow down, he said.

7% mortgage rates are probably coming within the next 9 months.You'll want to read this whole article to find about the ARM's that are going to be reset.