The average interest rate that lenders offered on 30-year home loans shot back above 4% this week for the first time since November, pushed by news of a strengthening economy.
The average for a 15-year mortgage rose from 3.08% to 3.25%, and the start rate for an adjustable-rate loan with a fixed rate for the first five years was 3.01%, up from 2.96%.
The rates rose as investors, reacting to a robust report on jobs, dumped conservative government bond investments and piled into stocks, with the Dow Jones and other indexes adding well over 1% on Wednesday. The Dow, Nasdaq and S&P 500 indexes continued to rise Thursday morning.
Mortgages tend to track the yield on the benchmark 10-year Treasury security, which has risen from a recent low of 2.1% in late May to nearly 2.5% on Wednesday.
Investors require higher interest rates on government and mortgage bonds as demand for fixed-income securities wanes and expectations for inflation rise.
The trend is pulling mortgage rates along with it.
"Markets are responding to strong employment data," Freddie Mac deputy chief economist Len Kiefer said in announcing the weekly survey.
The survey asks lenders each Monday through Wednesday morning about the terms they are offering to solid borrowers seeking mortgages of up to $417,000 that conform to the guidelines of Freddie Mac and
The borrowers would have paid a little more than half of 1% of the loan balance in upfront lender fees and discount points to obtain the fixed rates. Payments for such services as appraisals and title insurance are not included.
The survey provides a consistent gauge of mortgage trends, but actual rates adjust constantly and are influenced by many factors. Those include borrowers' credit histories and debt loads and whether they opt for zero-cost loans at higher rates or pay extra points to lenders initially to further lower the rates.
At the Mortgage Grader brokerage in Laguna Niguel, broker Jeff Lazerson was quoting a 30-year rate of 3.875% Thursday morning to solid borrowers who paid him 1% of the loan amount upfront.