Long-term interest rates were generally slightly higher during the week ended April 3, while short-term, variable rates drifted a bit lower.

The Freddie Mac's Primary Mortgage Market Survey reported an average rate for the 30-year fixed-rate mortgage (FRM) of 5.88 percent with 0.5 point. This is an increase of 3 basis points over the rate the previous week when fees and points were also .05 point.

The 15-year FRM increased to 5.42 percent from 5.34 percent a week earlier. Fees and points were unchanged at 0.5 point.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) were down from 5.67 with 0.6 point during the week ended March 27 to 5.59 percent with 0.5 point this past week.

One-year Treasury-indexed ARMS averaged 5.19 percent, down from 5.24 percent the previous week. Fees and points were unchanged at 0.5 point.

Frank Nothaft, Freddie Mac vice president and chief economist said in a press release, "While prime, conforming rates still remain at historically low levels, long-term mortgage rates did drift slightly upwards this week on signs that the economy may have a little more strength than what financial markets forecasted. For instance, consumer spending in the fourth quarter of 2007 was revised upwards in the final estimate of Gross Domestic Product (GDP). More recently, February's personal income growth was the strongest since July 2007, and the ISM manufacturing index rose unexpectedly in March. Strong economic growth can lead to an up-tick in inflation fears, which tends to place upward pressure on mortgage rates; however, fears of economic recession, too, are putting pressure on the markets.

"Housing, however, still continues to be a drag on the economy. In 2007, residential fixed investment shaved nearly a full percentage point off of GDP, the most since 1980. In February, median existing house prices (excluding condominiums and co-ops) were 16.0 percent below the peak in June 2007 and median new home prices were 7.0 percent below the record set in March 2007. Moreover, new construction of one-family homes was 61.5 percent below its all-time recent peak in January 2006."

The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ended April 4 on Wednesday morning. The survey, which covers a larger and a more diverse group of lenders than the Freddie Mac study, reported that the average contract interest rate for 30-year FRMs increased to 5.78 percent from 5.75 percent with points, including the origination fee, decreasing to 1.11 from 1.19.

The 15-year FRM increased 8 basis points to 5.39 percent with points decreasing to 1.11 from 1.13.

The average contract interest rate for one-year ARMs increased from 7.0 percent to 7.06 percent with points up to 1.46 from 1.39.

Mortgage activity as measured by application volume increased 5.4 percent on a seasonally adjusted basis from the previous week and 5.7 percent on an unadjusted basis. Volume was 10.9 percent higher than during the same week one year earlier.