By Nathalie Voit

Mortgage rates rose steeply for the first time this week after three weeks of gradual declines, according to data from Mortgage News Daily.

After ending the week of May 27 at 5.25%, the average rate on the popular 30-year fixed hit 5.36% on May 31 and moved even higher to 5.47% the next day. In both instances, interest rates on the conventional home loan increased 11 basis points. The previous high, set three weeks ago, was 5.67%.

Just-released data from the Institute for Supply Management helped explain the unexpected jump on May 31. The report showed the manufacturing sector in May was more resilient than expected despite surging rates and high input costs.

“The uptick in the manufacturing index suggests the economy isn’t slamming on the brakes very quickly,” wrote the COO of Mortgage News Daily, Matthew Graham.

Experts from the Mortgage Bankers Association (MBA), the National Association of Realtors, and other industry leaders are divided on whether the 30-year fixed will keep rising in June or level off.

“With much uncertainty in the economic outlook, mortgage rates are likely to continue to creep up over the next month, particularly as Fed’s rhetoric around reestablishing price stability continues to drive expectations of temporary overshoot in the fund rate,” Deputy Chief Economist at CoreLogic Selma Hepp said, according to The Mortgage Reports.

Others believe rates will moderate.

“Our forecast is for mortgage rates to continue to hover above the 5% mark over the next few months,” Associate Vice President of Industry Surveys and Forecasting for MBA Joel Kan said, according to The Mortgage Reports. 

Mortgage rates surged 156 basis points (1.56%) through the year’s first quarter. This was the fastest 3-month rate gain since May 1994, according to Freddie Mac.