Peak buying time ahead, mortgage rates rise Friday, February 11, 2011; 1:19 PM The average rate on a 30-year mortgage topped 5 percent this week for the first time since April, and higher rates could further hamper the struggling housing market ahead of the spring's prime home-buying season. Freddie Mac said Thursday that the average rate rose to 5.05 percent from 4.81 percent the previous week. The average rate on the 15-year home loan, a popular refinance option, increased from 4.08 percent to to 4.29 percent. The average rate on a five-year adjustable-rate mortgage rose to 3.92 percent from 3.69 percent, and the average rate on one-year adjustable-rate home loans increased from 3.26 percent to 3.35 percent. Thirty-year rates are following the yields on the 10-year Treasury note, which are spiking on fears of higher inflation. Investors have been demanding higher Treasury yields since the Federal Reserve began its $600 billion bond-buying program to boost the economy. Rates may not have an effect on homebuying until they reach about 6 percent, said Tom Tzitzouris, head of the fixed-income department at Strategas Research Partners in New York. The current levels are a "neutral zone," and buyers are neither prodded to sign nor discouraged from the market, he said. "If you get another uptick again next week, you may see some movement," said Tzitzouris, who previously worked as a valuation manager for Freddie Mac and as a debt securities analyst for Fannie Mae. The payment difference between today's rate and the historically low rate in November on a $200,000 loan is less than $100 a month, not enough to price a buyer out of a market, said Greg McBride, a senior financial analyst with Bankrate.com. There also are many buyers who are paying cash. Mortgage applications fell for the second time in three weeks, a Mortgage Bankers Association index showed Wednesday. The group's gauge of purchases decreased 1.4 percent in the week ended Feb. 4, and its refinancing measure dropped 7.7 percent. To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day. The rates do not include add-on fees, known as points. The average fee for the 30-year and 15-year loan in Freddie Mac's survey was 0.7 point. The average fee for the five-year and 1-year ARM was 0.6 point.