Mortgage rates rebounded this week following upbeat economic reports on employment and retail sales. The average 30-year fixed rate mortgage increased to 6.13 percent, which is still the third-lowest level of 2006. According to Bankrate.com’s weekly national survey of large lenders, the 30-year fixed rate mortgages had an average of 0.24 discount and origination points.

The average 15-year fixed rate mortgage popular for refinancing rose to 5.86 percent. On larger loans, the average jumbo 30-year fixed rate is now 6.38 percent. The average 5/1 adjustable rate mortgage climbed above the 6 percent mark to 6.02 percent while the average one-year ARM was unchanged at 5.88 percent.

Mortgage rates reversed much of the previous week’s decline after the monthly employment report and strong retail sales hinted at underlying strength in the economy. In the current good-news-is-bad-news economic climate, any signs of economic strength are feared to feed inflation and prompt another Fed hike. While that might be a stretch, good economic news certainly prolongs the period of time until the Fed might cut rates. Investors don’t respond kindly to that, pricing bond prices lower and bond yields higher. Mortgage rates are closely related to the yields on long-term government bonds.

Fixed mortgage rates have moved sharply lower since the Fed stopped raising interest rates. When the Fed last hiked rates in late June, the average 30-year fixed mortgage rate was 6.93 percent. At the time, the monthly payment on a loan of $165,000 was $1,090. With the average 30-year fixed rate now 6.013 percent, the same loan originated today would carry a monthly payment of $1,003.09. Fixed mortgage rates are a compelling refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.