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Mortgage Rates in U.S. Rise to Highest Level in Six Weeks

Mortgage Rates in the U.S. Rise to Highest Level in Six Weeks
Home-loan costs have increased after hovering close to record lows early this month. Photographer: David Paul Morris/Bloomberg

May 16 (Bloomberg) -- U.S. mortgage rates rose, pushing borrowing costs for a 30-year loan to the highest in six weeks.

The average rate for a 30-year fixed mortgage climbed to 3.51 percent in the week ended today, up from 3.42 percent and the highest since early April, McLean, Virginia-based Freddie Mac said in a statement. The average 15-year rate increased to 2.69 percent from 2.61 percent.

Home-loan costs have increased after hovering close to record lows early this month. Low rates are fueling a frenzy of demand in some markets as buyers compete for a tight supply of properties. While values remain well below their peak, 133 of the 150 metropolitan areas tracked by the National Association of Realtors had price increases in the first quarter from a year earlier. Areas such as San Francisco, Atlanta, Phoenix and Reno, Nevada, saw jumps of more than 30 percent.

“In many ways, it’s the same mentality as what saw in the boom,” Jonathan Miller, president of New York-based appraiser Miller Samuel Inc., said in a telephone interview. “The only difference is that we have tight credit that is keeping the process close to honest for the time being.”

The record rate for a 30-year mortgage is 3.31 percent, reached in November, according to Freddie Mac. The 15-year average fell to a record-low 2.56 percent this month.

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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