The real estate website Zillow.com has reported that interest rates on 30-year fixed-rate mortgages in the US increased to 5.57 percent late Thursday, after lingering in the region of 5.47 percent on Wednesday. 

However, Zillow Mortgage Marketplace has also said that there has still been a somewhat sharp fall in the weekly mortgage rates’ figures, with the rates the previous week being 5.76 percent. At the same time, the latest week’s rate is higher than the nearly 5.00 percent level reported in May-end, and also at the beginning of this year.

With the home loan refinancing activity already moving through a low phase in the past few weeks, the higher mortgage rates – which indicate an increase in returns on US government bonds linked to the mortgage market - would likely diminish demand.

Noting that a weather-beaten housing market is both the cause and the consequence of the credit crisis, Lawrence J. White - Professor of Economics at New York University's Stern School of Business - said that along with the higher mortgage rates, there are other factors too suppressing demand and impeding US housing market recovery.

Elaborating further, White said: “People are worried about the overall economy, how secure their jobs are as well as their overall financial status. So, while higher mortgage rates matter, they are not the sole driver of housing demand.”