At 5.88, the average 30-year fixed interest rate increased slightly from last week's average of 5.85 percent with mortgages including an average of 0.5 points. The 30-year fixed-rate mortgage averaged 6.17 percent a year ago, the report said.

Fifteen-year fixed rate mortgages also gained during the week ending April 3, averaging 5.42 percent with an average of 0.5 points. A week ago 15-year fixed rate mortgages averaged 5.34 percent, while a year ago they averaged 5.87 percent, the weekly report said.

"While prime, conforming rates still remain at historically low levels, long-term mortgage rates did drift slightly upward this week on signs that the economy may have a little more strength than what financial markets forecast," said Freddie Mac chief economist Frank Northaft.

"Housing, however, still continues to be a drag on the economy," he said.