WASHINGTON (AP) — Mortgage rates climbed this week to their highest levels since early January amid mounting signs that the economy's recovery is establishing deeper roots.
The average rate on benchmark 30-year, fixed-rate mortgages rose to 5.79 percent this week, up from 5.52 percent last week, mortgage giant Freddie Mac reported Thursday in its weekly nationwide survey of mortgage rates.
This week's rate was the highest since Jan. 8, when 30-year mortgages averaged 5.87 percent.
Rates for 15-year, fixed-rate mortgages, a popular option for refinancing, increased this week to 5.12 percent, compared with 4.84 percent last week. For one-year adjustable mortgages, rates moved up this week to 3.65 percent, from 3.46 percent. This week's rates for both 15-year and one-year ARMs also were the highest since Jan. 8.
Signs that the recovery is gaining ground, including a good employment report for March released by the government last week, were factors in pushing bonds rates up, causing long-term mortgage rates to rise, analysts said.
"The bond market reacted to the welcome news last Friday that jobs are finally being created, which is much needed for continued expansion of the economy," said Amy Crews Cutts, Freddie Mac's deputy chief economist.
"Mortgage rates again followed the bond market, rising significantly from last week to this week, and spurring speculation that the Federal Reserve will raise rates sooner rather than later," she said.