Mortgage Rates Climb Again : Banking: As economy shows signs of gathering strength, some analysts say long-term rates touched bottom last month.

Mortgage interest rates continued their three-week climb Friday, leading some economists to conclude that rates on long-term, fixed home loans clearly hit bottom last month and are now bouncing back.

After hitting a 25-year low of 6.75% on 30-year fixed-rate loans in mid-October, the rate has risen steadily and stood at a nationwide average of 7.1% on Friday, although the average rate remained slightly below 7% in depressed Southern California.

The rise, sparked by better than expected employment statistics released by the Labor Department, was the sixth straight session of higher yields. The record low of 5.77% was set Oct. 15.

Still, economists noted that the current fixed rates remain at their lowest levels in 20 years and warned consumers looking to buy a house or refinance a home loan to move quickly because rates could continue to rise modestly through the first half of 1994.

“These rate increases should be a warning signal to anyone sitting on the fence that it is time to get off,” said David Lereah, chief economist for the Mortgage Bankers Assn. in Washington. “It’s not time to panic, but it is time to get moving.”

Lereah and other economists discounted the likelihood that mortgage rates will drop back as they did earlier this year. The difference now, explained David Berson, chief economist for the Federal National Mortgage Assn., is that the nation’s economy appears to be gathering sustained momentum that will fuel demands for credit and keep a modest upward pressure on interest rates.

“Even at 7.25%, mortgage rates are at their lowest in 20 years, and consumers should recognize a good deal when they see it,” Berson said.

That message is being repeated across the country as mortgage brokers and bankers plead with their clients to give up their by-now futile efforts to get the absolute lowest mortgage rate possible.

Consumers who waited too long for that “perfect rate” said Friday that they regretted their lack of action.

“I could kick myself,” said Mark Cohen, a jeweler who passed up a chance for a 6.875% rate on his Beverly Hills home refinancing two weeks ago and now must accept a loan of more than 7.25%. It was the second time in a year that Cohen had tried to guess which way interest rates would go on a home refinancing.

Cohen said he refused to accept last month’s lower rate because when he refinanced his home for the first time a year ago, rates dropped after he locked in his.

“This time, I decided to go with the flow, and I lost again,” Cohen said. “I’m a two-time loser at timing interest rates.”

Berson said consumers who manage to get the lowest rates are more lucky than smart. “The people who time it right just happen to be at the right place at the right time,” he said. “It’s almost impossible to determine what the absolute lowest point is until it’s been passed.”

Even though the bottom appears to have been hit, Berson said interest rates in the low 7% range are still quite favorable by historical standards and should not disqualify a great number of would-be home buyers or refinancers.

For example, a 30-year, $160,000 mortgage at 6.75% would carry a monthly payment of $1,038, while the same mortgage at 7.25% would cost $54 more, or $1,091.

However, mortgage bankers acknowledged that the recent interest rate rise could choke off the rash of multiple refinancings that have been fueling the market recently.

Anxious to lower their monthly payments, homeowners took advantage of “no-point, no-fee” refinancing offers to lower their mortgage rates by as little as half a percentage point. Now that rates have eased back up, the refinancings make less economic sense.

One broker estimated that the latest increase wiped out the potential savings for as many as 20% of his pending loan applications.

Mortgage rates jumped as yields on the benchmark 30-year U.S. Treasury bond jumped to 6.2% on Friday, its highest point since mid-August.

Mortgage rates generally move in tandem with long-term Treasury bonds because most fixed-rate home loans are resold into the secondary market to investors who seek yields that are consistent with, but slightly higher than, the 30-year Treasury bond.