Longer term mortgage rates hit 2007 highs during last week according to the results of Freddie Mac's Primary Mortgage Market Survey. With the exception of the one-year adjustable rate mortgage (ARM) rates have gone up 20 or more basis points in the last two weeks.

The 30-year fixed-rate mortgage (FRM) increased to 6.42 percent with 0.4 point compared to 6.37 percent with 0.4 point the previous week. This is the highest rate for the 30-year since the week ended September 14, 2006.

The 15-year FRM averaged 6.12 percent. The previous week it averaged 6.06 percent. Fees and points were unchanged at 0.4. The last time the 15-year FRM reached this level was September 7, 2006.

The five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) had an average contract interest rate of 6.19 percent, with an average 0.5 point. During the week ended May 24 it averaged 6.02 percent also with 0.5 point. This is the highest rate for the 5/1 hybrid since August 10, 2006.

Conversely, the one-year Treasury-indexed ARMs actually dropped seven basis points to 5.57 percent with fees and points unchanged at 0.6.

"Interest rates on fixed-rate mortgages increased further this week following stronger growth in orders for durable goods," said Frank Nothaft, Freddie Mac vice president and chief economist. "Recent reports have indicated that economic growth outside of the housing market remains robust, with a healthy consumer sector and improving business spending."

"April's total home sales (including condominiums and co-ops) were below the pace of last year, and the S&P/Case-Shiller® 20-market composite index shows home values off by 1.4 percent over the year ending March."

The Weekly Mortgage Applications Survey by the Mortgage Bankers Association also reported increases in fixed-rate mortgage products from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased slightly to 6.35 percent from 6.32 percent, with points, including the origination fee, up to 1.5 from 1.41.

The 15-year fixed-rate mortgage increased eight basis points to 6.13 with points decreasing to 1.2 from 1.27.

The rate for one-year ARMs remained unchanged at 5.74 percent, with points increasing to 1.14 from 1.09.

Mortgage application activity lost 1.7 percent on a seasonally adjusted basis from a week earlier (there was an additional adjustment to account for the shortened work week because of the Memorial Day holiday) and 12 percent on an unadjusted basis. Applications increased 16.5 percent over the same period one year earlier.

Refinancing as a share of all mortgage activity was down to 38 percent from 39.7 the previous week. Adjustable rate mortgages gained a tiny bit of market share, increasing from 17.7 percent to 17.8 percent of all applications compared to a week earlier.