US mortgage rates rise, though remain historically low

U.S. mortgage rates rose this week as the economy showed signs of strength, which makes it more likely that the Federal Reserve will raise its short-term rate next week.

The rate on the benchmark 30-year fixed-rate mortgage rose to 3.94 percent from 3.9 percent last week, mortgage giant Freddie Mac said. The 15-year, fixed-rate mortgage, popular among homeowners seeking to refinance, also increased, rising to 3.36 percent from 3.3 percent.

The five-year adjustable mortgage rate rose for the third straight week to 3.35 percent from 3.32 percent last week.

Shorter-term rates are rising more quickly than longer-term debt, and the gap between the 30-year mortgage and five-year has narrowed since the summer. As a result, more homebuyers are choosing the longer-term fixed rate, Freddie Mac said.

Even with the increase, the 30-year rate is down from the beginning of the year, when it stood at 4.13 percent. Any rate below 5 percent is low by historic standards.

The number of people seeking unemployment benefits is near a four-decade low and surveys of manufacturers and service firms point to healthy growth.

Federal Reserve policymakers meet next week and are widely expected to lift their short-term rate for the third time this year.