Mortgage rates head higher

WASHINGTON, May 16 (UPI) -- Average U.S. mortgage rates for long-term loans rose for the second consecutive week in the week ended Thursday, the Federal Home Loan Mortgage Corp. said.

Prior to the two-week stretch, interest rates had dropped for six consecutive weeks.

In the current week, average rates on 30-year fixed rate loans rose from 3.42 percent to 3.51 percent with an average 0.7 point, Freddie Mac said.

Average rates for 15-year fixed rate loans rose from 2.61 percent to 2.69 percent with an average 0.7 point.

Average interest rates for five-year adjustable rate mortgages rose from 2.58 percent to 2.62 percent with 0.5 point, Freddie Mac said. And one-year adjustable rate mortgages using 10-year bonds as a benchmark averaged 2.55 percent with 0.4 point in the week, up from 2.53 percent in the previous week.

One point is equal to 1 percent of the amount of the loan and is typically paid up front. It includes a corresponding discount on the loan's long-term interest rates.

"Mortgage rates followed U.S. Treasury bond yields higher this week on signs of stronger consumer spending," said Frank Nothaft, vice president and chief economist at Freddie Mac.

"Households are also shoring up their balance sheets," he said, noting household debt had declined by $110 billion in the first quarter.