Mortgage rates move back up

NEW YORK (CNNMoney.com) -- Mortgage rates climbed this week after trending lower recently, Freddie Mac said Thursday, after Federal Reserve said it continues to worry about the threat of inflation.

The average rate on 30-year fixed-rate loans was 6.21 percent for the week ending May 16, up from 6.15 the previous week, the mortgage finance firm said. Last year at this time, 30-year mortgage rates averaged 6.60 percent.

"Mortgage rates inched up this week following the Federal Open Market Committee statement reiterating that the predominant concern remains the risk that inflation will fail to moderate as expected," Frank Nothaft, Freddie Mac vice president and chief economist, said in a prepared statement.

"However, as long as core inflation continues to trend downward and economic growth remains sub-par it is unlikely that we will see any big movement in mortgage rates."

Last week the Federal Reserve held interest rates steady for the seventh straight time, but indicated in its statement it was concerned about slower economic growth as well as inflation, suggesting that the central bank will not raise interest rates time soon.

Consumer prices rose less than expected in April, the government reported earlier this week, but core prices of the Consumer Price Index rose at faster pace.

The rate on 15-year loans averaged 5.92 percent, up from 5.87 the previous week, Freddie Mac (Charts, Fortune 500) said. A year ago, the 15-year rate averaged 6.20 percent.

Five-year adjustable-rate mortgages rose to 5.92 percent up from 5.89 percent last week. The five-year ARM averaged 6.23 percent a year ago.

The average one-year adjustable-rate mortgage averaged 5.48 percent, unchanged from the previous week. At this time last year, the loan averaged 5.62 percent.