Interest rates on U.S. 30-year fixed-rate mortgages rose to 5.57 percent late Thursday after hovering around 5.47 percent on Wednesday, according to real estate Website Zillow.com.
But that is down sharply from a week earlier when the mortgage rate was around 5.76 percent, according to Zillow Mortgage Marketplace.
The higher rates reflect a rise in yields on U.S. government bonds, which are linked to the mortgage market.
The rate, however, is sharply higher than the roughly 5.00 percent level seen at the end of May and at the beginning of this year, Zillow said.
Home loan refinancing activity has dropped precipitously in recent weeks. A move higher in mortgage rates should further dampen demand.
Lawrence J. White, professor of economics at New York University's Stern School of Business, said that higher mortgage rates are certainly an impediment to a U.S. housing market recovery, but other factors are also suppressing demand.
People are worried about the overall economy, how secure their jobs are as well as their overall financial status, he said.
So, while higher mortgage rates matter, they are not the sole driver of housing demand, he said.
The battered U.S. housing market, which is in the midst of its worst downturn since the Great Depression, is both the source of and a major casualty of the credit crisis.
A setback for the market could hamper a turnaround of the U.S. economy.
U.S. Mortgage