Mortgage rates haven't been this high since 2013

Mortgage rates surged to their highest level in almost five years this week.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average jumped to 4.58 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.47 percent a week ago and 4.03 percent a year ago. The 30-year fixed rate hasn't been this high since August 2013.

The 15-year fixed-rate average climbed to 4.02 percent with an average 0.4 point. It was 3.94 percent a week ago and 3.27 percent a year ago. The 15-year fixed rate hasn't been above 4 percent in seven years.

The five-year adjustable rate average grew to 3.74 percent with an average 0.3 point. It was 3.67 percent a week ago and 3.12 percent a year ago.

After plateauing the past couple months, mortgage rates are once again headed higher. The market is reacting to strong economic reports and statements from Federal Reserve officials who appear supportive of raising interest rates, which is having an effect on long-term bond yields.

The yield on the 10-year Treasury crossed the 3 percent threshold for the first time in four years this week, closing at 3.03 percent on Wednesday. Because mortgage rates tend to follow a similar path as long-term bond yields, home loan rates have also risen.

"After flatlining for much of the past two months, mortgage rates have again moved definitively upward," said Aaron Terrazas, senior economist at Zillow. "This upward momentum suggests a growing acceptance of the underlying strength of the American economy that markets seemed to discount over the past couple of months. Several Fed speakers over the past week noted the strength of incoming U.S. economic data, which will be particularly important going into next week's [Federal Open Market Committee] meeting. GDP and wage data due later this week will be important metrics to watch as recent geopolitical flash points seem to be receding."

Bankrate.com, which puts out a weekly mortgage rate trend index, found that more than half of the experts it surveyed say rates will continue to rise in the coming week. Michael Becker, branch manager at Sierra Pacific Mortgage, is one who predicts higher rates.

"While I expected an increase in mortgage rates over the last week, I was surprised at the abruptness of the move higher," Becker said. "Mortgage rates and the 10-year Treasury yield are up about 0.25 percent in a little over a week. That is a pretty big move in a short time. The move higher in rates is even more concerning considering the sell-off in equity markets. It seems markets are focused on the potential for inflation, a big increase in Treasury issuance due to the Trump tax cut, and receding support for lower rates from the Fed and other central banks around the world."

But Shashank Shekhar, CEO of Arcus Lending, expects rates to ease a bit.

"With six continuous days of mortgage rate increases, I think it's time for the market to take a pause and even reverse the course," Shekhar said. "If it does reverse the course, it won't last long and it won't be significant. The medium- to long-term trend still points toward higher rates because of concern for inflation and higher borrowing rate. However, in the coming week, we might just see a slight drop."

Meanwhile, mortgage applications were flat last week, according to the latest data from the Mortgage Bankers Association. The market composite index - a measure of total loan application volume - decreased 0.2 percent from a week earlier. The refinance index fell 0.3 percent, while the purchase index was unchanged.

The refinance share of mortgage activity accounted for 37.2 percent of all applications, its lowest level since September 2008.

"Applications for home purchase were up 10 percent compared to one year ago, driven by an increase in conventional purchase applications, which were at their highest level since January 2009," MBA president David Stevens said. "In contrast, government purchase applications actually declined. Refinance applications continued to remain very low, dropping to 37.2 percent of all activity."