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Mortgage Rates in U.S. Rise for First Time in Six Weeks

May 9 (Bloomberg) -- Mortgage rates in the U.S. rose for the first time in six weeks after borrowing costs near all-time lows spurred demand for home loans.

The average rate for a 30-year fixed mortgage climbed to 3.42 percent in the week ended today from 3.35 percent, McLean, Virginia-based Freddie Mac said in a statement. The average 15-year rate increased to 2.61 percent from a record-low 2.56 percent.

Americans are taking advantage of low interest rates to buy homes or refinance into less-expensive loans. The Mortgage Bankers Association’s index of home-loan applications rose for a fifth week in the period ended May 3. The refinancing measure jumped 8.3 percent, the most in two months, and the purchase gauge advanced 2.4 percent, the group said yesterday from Washington.

There’s “mounting evidence that mortgage-dependent buyers are starting to play a fuller role in the housing market recovery,” Paul Diggle, property economist for Capital Economics Ltd. in London, wrote in a note to clients yesterday.

Buyers are bidding up prices for a tight supply of available properties. U.S. home prices increased 10.5 percent in March from a year earlier, the biggest gain in seven years, according to CoreLogic Inc., a Irvine, California-based data provider.

The record rate for a 30-year mortgage is 3.31 percent, reached in November, according to Freddie Mac.

To contact the reporter on this story: Prashant Gopal in Boston at pgopal2@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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