WASHINGTON – Mortgage giant Freddie Mac said rates on 30-year, fixed-rate mortgages averaged 6.58 percent this week, up from 6.53 percent last week.
The new rate was the highest since 30-mortgages stood at 6.63 percent the week of June 20, 2002.
The rise in mortgage rates was attributed to last week's surge in oil prices, which saw crude oil futures hit a record of $75.17 last Friday, and signs this week of stronger economic growth. Both of those developments raised worries about rising inflationary pressures.
However, Federal Reserve Chairman Ben Bernanke opened the door to taking a pause in the Fed's nearly two-year long campaign of raising interest rates.
He told Congress on Thursday that at some point in the future the Fed "may decide to take no action at one or more meetings" to give policy-makers time to assess the rate hikes that have already occurred.
Many analysts said they expect mortgage rates to continue rising gradually for the rest of the year with this increase translating into a drop of about 10 percent in sales. Sales of both new and existing homes have set records for five straight years.
"A stronger labor market, coupled with moderation in house price growth, means our outlook for overall housing conditions remains upbeat," said Frank Nothaft, Freddie Mac's chief economist.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, climbed to 6.21 percent this week, up from 6.17 percent last week.
One-year adjustable rate mortgages increased to 5.68 percent this week, up from last week's 5.63 percent. Rates on five-year, hybrid adjustable-rate mortgages averaged 6.21 percent this week, up from 6.16 percent last week.
The mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages carried an average nationwide fee of 0.5 point. Five-year mortgages had a fee of 0.6 point and one-year ARMs carried a fee of 0.7 point.
A year ago, 30-year mortgages averaged 5.78 percent, 15-year mortgages stood at 5.33 percent, one-year ARMs were at 4.21 percent and five-year ARMs averaged 5.20 percent.