By Jeff McKinney
The Cincinnati Enquirer

It got a little harder to buy a house in Greater Cincinnati this week as local mortgage rates jumped about a quarter of a percentage point, hitting their highest levels since fall 2002.

The average 30-year, fixed-rate mortgage with no points was 6.31 percent, according to a survey of about 15 lenders released Tuesday by the Cincinnati Area Board of Realtors.

This week's average rise is up from 6.07 percent a week ago and 5.65 percent a year ago. It's also the highest level locally since October 2002, when it was 6.33 percent.

The rising rates mean higher borrowing costs for potential homebuyers and less attractive refinancing options for homeowners.

The rates also could slow down a strong local housing market, on pace so far in 2004 for another record year. Home sales in Greater Cincinnati for the last three consecutive years have hit banner levels.

Rates on shorter-term mortgages also inched up.

The average rate on a 15-year fixed-rate mortgage was 5.66 percent, up from 5.38 percent last week, and the one-year adjustable rate was 3.50 percent,up from 3.44 percent.

Keith Wirtz, senior vice president and chief investment officer at Fifth Third Asset Management, said rates could be rising because of:

• Signs of a growing economy, including 900,000 new jobs created this year;

• The Federal Reserve beginning to signal that it could soon raise interest rates.

• Signs of price inflation on commodity items.

"Those three factors are clearly why rates in general, including mortgage rates, are starting to rise," Wirtz said.

E-mail jmckinney@enquirer.com