Mortgage rates tick up, but applications still hit a 9-year high

Rates for home loans rose as economic indicators strengthened, mortgage guarantor Freddie Mac reported Thursday.

The 30-year, fixed-rate mortgage averaged 4.17% in the April 18 week, up from 4.12%. That was the third straight weekly increase for the popular product, a feat it hadn’t achieved since September. The 15-year fixed-rate mortgage averaged 3.62%, up two basis points. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.78%, down from 3.80%.

Those rates don’t include fees associated with obtaining mortgage loans.

See also: Mortgages? Big banks may be throwing in the towel

Fixed-rate mortgage rates follow the yield of the 10-year U.S. Treasury noteTMUBMUSD10Y, +0.00%   which has risen as investors grow more confident about the health of the economy. Strong data, like the lowest jobless claims in five decades, has made riskier assets, like stocks, more attractive. When bond prices decline, yields, or rates, rise.

As mortgage rates churn higher, affording a new home purchase will become more challenging for some Americans. But financing costs remain extremely low compared to historical norms. And the five-basis-point increase over the past week would add about $6 a month to the cost of principal and interest on a median-priced home, according to Zillow’s Mortgage Calculator.

Consumers seem to know that. Applications for purchase mortgages hit a nine-year high in the most recent week, even as rates ticked slightly higher, the Mortgage Bankers Association said Wednesday. Demand is strong, and many Americans who’ve been shut out of a hyper-competitive housing market for years may finally get their chance.