Climbing mortgage rates are slowing refinancing activity and could turn off some prospective home buyers, economists say.

The average rate on 30-year fixed-rate mortgages for the week ending today was 6.14 percent, up sharply from last week's rate of 5.94 percent, mortgage giant Freddie Mac reported yesterday in its weekly nationwide survey.

This week's rate marked the highest since the week ending Dec. 6, 2002, when rates on 30-year mortgages averaged 6.19 percent.

The recent upward swing in mortgage rates marks a turnaround from the middle of June, when rates on 30-year mortgages slid to 5.21 percent, the lowest level seen in more than four decades.

Several factors have contributed to rising mortgage rates, economists said. They include signs that the economy is gaining traction; concern about swelling federal budget deficits; and disappointment on Wall Street that the Federal Reserve didn't make a bolder cut to short-term rates on June 25. Those factors have pushed bond rates up, causing long-term mortgage rates to rise.

Although economists believe the economy will pick up momentum in the second half of this year, there is concern that a dramatic and continued rise in long-term rates could threaten that.

For 15-year fixed-rate mortgages, a popular option for refinancing, rates jumped to 5.44 percent this week, up from 5.27 percent last week. This week's rate was the highest since the week ending Dec. 13, 2002, when 15-year mortgages averaged 5.46 percent.

Rates for one-year adjustable mortgages rose this week to 3.68 percent, up slightly from 3.67 percent last week.

"With the recent uptick in fixed-rate mortgage rates, we are starting to see short-term mortgage rate products like the one-year ARM gain in popularity," said Freddie Mac's chief economist, Frank Nothaft.

This week's mortgage rates do not include add-on fees known as points. Each loan type carried an average fee of 0.5 point.

A year ago, rates on 30-year mortgages averaged 6.43 percent, 15-year mortgages were 5.84 percent and one-year adjustable mortgages stood at 4.45 percent.

The recent rise in mortgage rates is taking some steam out of a refinancing frenzy.

Applications for new financing deals dropped by nearly 33 percent last week from the previous week, the Mortgage Bankers Association of America reported.

"Refinance applications have fallen to the lowest level seen this year and are down more than 50 percent from where they were just four weeks ago — not surprising given the sharp increase in (mortgage) rates since mid-June," said Jay Brinkmann, the association's vice president of research and economics.

Refinancing has been an important factor underpinning consumer spending, a main force keeping the economy going. Extra cash or savings coming from refinancing deals, along with rising home values, have helped offset the negative force of a sluggish job market.

Economists said rising rates probably will cool the red-hot housing market a bit, but they still expect sales to remain healthy.