NEW YORK - U.S. mortgage rates rose for the first time in four weeks but remained below 5 percent, a key level that may spur home loan demand and help the hard-hit U.S. housing market recover.

Interest rates on U.S. 30-year fixed-rate mortgages averaged 4.92 percent for the week ending October 15, up from the previous week's 4.87 percent, according to a survey released on Thursday by home funding company Freddie Mac.

Mortgage rates were below 5 percent, widely viewed as a key psychological level, for a third straight week.

Homeowners are taking advantage of these low rates to refinance their current balances, Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.

The mortgage rate is still significantly higher than the record low of 4.78 percent set in the week ended April 2. Freddie Mac started the survey in 1971.

Mortgage rates are linked to both Treasury and MBS yields.

People are attempting to take advantage of refinancing opportunities, if they qualify, said Ellen Bitton, chief executive of Park Avenue Mortgage in New York.

Little by little, higher-end mortgage programs are reappearing, she said.

The Mortgage Bankers Association said home loan demand dipped last week.

Freddie Mac said the 15-year fixed-rate mortgage averaged 4.37 percent in the latest week, up from 4.33 percent the prior week.

One-year adjustable-rate mortgages, or ARMs, were 4.60 percent, up from 4.53 percent last week. Freddie Mac said the 5/1 ARM, set at a fixed rate for five years and adjustable each year following, was 4.38 percent, compared with 4.35 percent a week earlier.

A year ago, 30-year mortgage rates averaged 6.46 percent, 15-year mortgages 6.14 percent and the one-year ARM 5.16 percent. A year ago, the 5/1 ARM averaged 6.14 percent.

Freddie Mac (FRE.P)(FRE.N) and its larger sibling, Fannie Mae (FNM.P)(FNM.N), were placed under government conservatorship in early September, 2008.

Freddie Mac is a mortgage finance company chartered by Congress that buys mortgages from lenders and packages them into securities to sell to investors or to hold in its own portfolio.

(Editing by Jeffrey Benkoe)

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