Mortgage rates rose for a third straight week, moving above 5 percent and reaching their second-highest level this year, a closely watched mortgage survey showed on Thursday.
Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 5.08 percent for the week ended April 1, up from the previous week's 4.99 percent, according to a survey released by Freddie Mac , the No. 2 U.S. mortgage finance company.
That is above the year-ago level of 4.78 percent as well as the record low of 4.71 percent in early December. Freddie Mac started the survey in 1971.
"Interest rates for fixed mortgages rose this week following a run up in long-term bond yields, while ARM rates eased slightly," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.
Rising mortgage rates do not bode well for the housing market, which remains highly vulnerable to setbacks and heavily reliant on government intervention.
The timing could also spell trouble as the housing market enters its most important period — the spring selling season — and struggles to regain its old self as data shows growth has been anything but resurgent.
Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities.
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