Mortgage rates bounced higher this week, tracking a sharp jump in Treasury bond yields as investors bet on a healthier economy ahead.
The average interest rate on 30-year fixed-rate mortgages for the week ending March 21 was 5.79%, up from last week's record low rate of 5.61%, lending giant Freddie Mac reported Thursday in its weekly nationwide survey.
Long-term Treasury bond yields, which provide a benchmark for mortgages, have surged over the last week as more investors have sold bonds in favor of stocks. The bet has been that the U.S.-Iraq war would be over quickly, removing uncertainty and paving the way for the weak economy to rebound in the second half of the year.
The 10-year Treasury note yield hit a generational low of 3.56% on March 10. On Thursday it was at 3.96%.
Last week's average home loan rate was the lowest since Freddie Mac began tracking 30-year mortgage rates in 1971. Records that reach back earlier than Freddie Mac's indicate that the rate was the lowest since the early 1960s.