Mortgage rates up for 4th straight week

WASHINGTON — Rates on 30-year home mortgages rose for a fourth consecutive week, hitting their highest level this year, as investors continued to worry that a stronger economy will fuel inflation pressures.

The average rate on a 30-year, fixed-rate mortgage rose to 5.89 percent this week, up from 5.79 percent last week, mortgage giant Freddie Mac reported Thursday in its weekly nationwide survey of rates.

This week's rate was the highest since 30-year mortgages averaged 6.02 percent the week of Dec. 5. It marked the fourth straight increase since rates hit a low for this year of 5.38 percent the week of March 18.

"With economic news continuing to point to a growing economy, the financial markets are beginning to think about the likelihood of inflation again," said Frank Nothaft, chief economist at Freddie Mac.

Nothaft said recent economic reports showing an increase in job creation, retail sales and consumer prices have all fueled speculation in the markets that the Fed will raise interest rates in coming months.

"Add all that to the mix and mortgage rates were bound to rise this week," Nothaft said.

Rates for 15-year, fixed-rate mortgages, a popular option for refinancing, increased this week to 5.23 percent, compared with 5.12 percent last week. For one-year adjustable mortgages, rates moved up this week to 3.69 percent, from 3.65 percent. This week's rates for both 15-year and one-year ARMs also were the highest for the year.

The nationwide averages for mortgage rates do not include add-on fees known as points. The 30-year, 15-year and one-year all carried an average fee of 0.6 point this week.

This time last year, rates on 30-year mortgages averaged 5.82 percent, 15-year mortgages were 5.12 percent and one-year adjustable mortgages stood at 3.79 percent.