Mortgage rates climb

A jump in interest charges for fixed-rate mortgages suggests that the Federal Reserve's effort to stimulate the housing market is becoming less effective.

Fixed mortgage rates rose to their highest level since November, signaling that the Federal Reserve's plan to lower borrowing costs is stalling.

The average 30-year rate rose to 5.59 percent from 5.29 percent a week earlier, Freddie Mac, the government-sponsored mortgage buyer, said Thursday in a statement. The 15-year rate averaged 5.06 percent.

Rising rates may deepen the housing slump by sidelining people who want to refinance or purchase a house. Mortgage applications fell last week to the lowest since February and shares of the largest homebuilders have dropped 11 percent since May 1 on concern that more expensive loans will turn away prospective buyers. The increase in rates announced Thursday was the biggest weekly jump since October. Rates were last higher in the week ended Nov. 27, when they were 5.97 percent.

''The economy doesn't need higher mortgage rates because that will depress the level of home sales, cut off refinancing, and keep consumer spending sluggish,'' said Patrick Newport, an economist with Lexington, Mass.-based IHS Global Insights.

The Mortgage Bankers Association's index of applications to purchase a home or refinance a loan dropped 7.2 percent to 611 in the week ended June 5. Purchase applications rose 1.1 percent while requests to refinance fell 12 percent.