After a monthlong downward trend, interest on long-term mortgages moved up for the second consecutive week. Freddie Mac puts the average 30-year fixed rate at 6.13 percent this week, up a notch from 6.12 percent last week. The 15-year fixed rate, which is popular among refinancing borrowers, also edged up to 5.89 percent from 5.86 percent.

Initial interest on five-year adjustable-rate loans increased as well, rising to 5.96 percent from 5.92 percent. One-year ARMs, however, fell slightly from 5.45 percent to 5.44 percent.

Overall, interest rates still remain low, says Frank Nothaft, Freddie Mac chief economist. "This could bode well for housing in the new year," Nothaft speculates. "Indeed we have seen a spike in refinancing activity over the past few weeks as rates have come down. Borrowers who have adjustable-rate mortgages that are scheduled for a rate adjustment in 2007 may want to consider refinancing those loans now."

Source: Contra Costa Times (Calif.), Jeannine Aversa (12/22/06)