War sparks increase in mortgage rates

? Mortgage rates rose sharply this week as it became clear the United States would launch a military strike against Iraq.

That eased some uncertainty in financial markets, prompting some investors to shift to stocks from bonds, economists said.

Rising rates in the Treasury bond market helped spur the climb in mortgage rates.

This week’s rise in mortgage rates came after rates on 30-year mortgages set a new low last week.

The average interest rate on 30-year fixed-rate mortgages for the week ending March 21 was 5.79 percent, up from last week’s record low rate of 5.61 percent, Freddie Mac, the mortgage company, reported Thursday in its weekly survey.

“Lack of uncertainty around the Iraq conflict caused bond market yields to reverse their downward spiral of recent weeks and mortgage rates followed in tandem,” said Frank Nothaft, Freddie Mac’s chief economist.