After hovering for four weeks at 4.5%, the 30-year fixed-rate home loan appears to be heading higher.
The yield on the 10-year Treasury bond, a benchmark for long-term mortgages, had risen nearly a third of a percentage point by Thursday from its recent low point last Friday. Mortgage rates were following slowly, industry officials said.
Laguna Niguel mortgage broker Jeff Lazerson said he was telling borrowers with good credit on Wednesday that they could get a fixed-rate 30-year, non-jumbo loan at 4.625% with zero closing costs.
On Thursday, the rate for the same no-cost mortgage had edged up to 4.75%.
"Rates are still excellent but the mortgage waters are choppy," Lazerson said.
The factors nudging rates higher Thursday included a strong report on manufacturing, a sign the economy could pick up and increase inflation. It was also the final day of a $600-billion Federal Reserve program designed to tamp down rates and stoke the economy through purchases of Treasury securities.
Looking ahead, slightly higher rates appear likely, said Frank Nothaft, an economist at Freddie Mac, the giant government-backed mortgage finance company.
"Our expectation for the second half of the year is to see rates fluctuate between 4.5% and 5%. We've been at the low end of that range recently," Nothaft said. "We think it's likely to climb to the upper part of the range by the end of the year."
Freddie Mac's weekly survey of what lenders are offering to A-credit borrowers, compiled Monday through midday Wednesday, pegged the typical rate for a 30-year fixed-rate home loan at 4.51%.
That compared with 4.50%, 4.50%. and 4.49% in the three prior quarters. The 30-year rate had risen above 5% in February during a period of improving economic news.
The rate for 15-year fixed mortgages was unchanged at 3.69% early this week, Freddie Mac said.
Borrowers obtaining the 30-year and 15-year mortgages on average would have paid 0.7% of the loan amount in upfront fees and points to the lender, Freddie Mac said, with additional costs for third-party services such as appraisals.
The Freddie Mac survey asks lenders what rates they are offering to solid borrowers who have 20% down payments or 20% home equity if they are refinancing. Well-qualified borrowers who shop around often are able to obtain slightly better rates.