July 30 (Bloomberg) -- Mortgage rates in the U.S. rose for a second consecutive week, threatening a revival in property sales as higher borrowing costs made homes less affordable.

The average 30-year rate increased to 5.25 percent from 5.2 percent, mortgage buyer Freddie Mac of McLean, Virginia, said today in a statement. The 15-year rate was 4.69 percent.

New and existing-home sales rose in June as falling prices and a government tax credit helped lure buyers. The S&P/Case- Shiller home price index rose 0.5 percent in May from the prior month, the first gain since July 2006. Existing home sales climbed 3.6 percent to an annual rate of 4.89 million, according to the National Association of Realtors.

“Rates may be low, but I think lenders are still being very cautious,” said Celia Chen, senior director at Moody’s Economy.com in West Chester, Pennsylvania. “Lenders are just being careful about who they lend to.”

Federal Reserve Chairman Ben S. Bernanke is trying to lower borrowing costs with a program to purchase mortgage-backed securities. The central bank’s plan brought down yields on government debt and mortgage-backed bonds issued by Fannie Mae, Freddie Mac and Ginnie Mae, allowing lenders to reduce rates on new loans and still sell the securities at a profit.

The Federal Reserve’s $1.25 trillion plan helped drive rates to a record low 4.78 percent twice in April.

Treasury Yields

Rates started climbing in May along with Treasury yields on investor concern that higher government debt would fuel inflation.

New home sales rose 11 percent in June, the biggest gain in eight years as homebuilders reduced prices, the Commerce Department said on July 27. The median price fell 12 percent from a year earlier to $206,200.

The jump in sales of existing homes exceeded analysts’ estimates and marked June as the market’s strongest month since October, the Chicago-based National Association of Realtors said July 23.

The median existing home price fell 15 percent from a year earlier to $181,800.

The Mortgage Bankers Association’s index of home loan applications fell 6.3 percent to 495.4 in the week ended July 24. Purchase applications were little changed and requests to refinance fell 11 percent.

To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net.

Last Updated: July 30, 2009 10:38 EDT