The average U.S. rate on a 30-year fixed mortgage rose above 4 percent for the first time in five months. The sharp increase suggests the window to buy or refinance a home at historically low rates is closing.
Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan jumped to 4.08 percent, up from 3.92 percent the previous week. A month ago, it touched 3.87 percent, the lowest since long-term mortgages began in the 1950s.
The average on the 15-year fixed mortgage rose to 3.30 percent, up from 3.16 percent last week and a record low of 3.13 percent two weeks ago.
Mortgage rates are rising because they tend to track the yield on the 10-year Treasury note. The economic outlook has improved in recent weeks, leading investors to shift money out of long-term U.S. Treasury bonds and into stocks. That has driven Treasury yields higher.
With the economy getting stronger, the markets are beginning to recognize that rates are too low, that means mortgage rates should rise.