"After decreasing for a couple of weeks, mortgage rates are once again on the upswing," said Sam Khater, Freddie Mac's chief economist, in a press release. "As the spring home buying season gets underway, existing home inventory has increased slightly and new home construction has picked up."

While the 10-year Treasury yield, one of the benchmarks used to price mortgage loans, was virtually flat compared with its closing price seven days earlier at 4.29% as of noon on March 21, it was about 20 basis points higher than two weeks ago, prior to the release of the Consumer Price Index report that showed inflation running higher than expected.

The yield also remained elevated even with commentary by Federal Reserve Chairman Jerome Powell following this week's Federal Open Market Committee meeting that kept short-term rates at current levels.

Zillow's rate tracker put the 30-year FRM at 6.59%, up 4 basis points from the previous week's average of 6.55%.

"Mortgage rates increased this week ahead of the Fed's latest Summary of Economic Projections, as investors worried the FOMC forecast would reveal more stubborn inflation and fewer rate cuts this year," said Orphe Divounguy, senior macroeconomist at Zillow Home Loans, in a statement sent out on Wednesday night. "The committee expects stronger real [gross domestic product] and less disinflation in 2024 compared to its December forecast."

Divounguy added Powell's comments reassured the markets about the Fed's direction, and noted that it caused the 10-year yield to decline 2 basis points on the day Wednesday and 7 basis points since Monday to close at 4.27%. But it regained those 2 basis points on Thursday morning.

As Divounguy has said in the past, the 10-year yield is a measure of expectations regarding future inflation and economic growth.

"And according to the latest Fed projections, long-dated yields aren't expected to ease much," Divounguy said. "Expect more rate volatility ahead as the Fed and investors wait for more conclusive evidence of a return to low, stable and more predictable inflation."

Earlier this week, Fannie Mae updated its economic forecast and now expects rates to remain over 6% through the end of 2025.

The core Personal Consumption Expenditures price index data release next week will likely cause more mortgage repricing activity, Divounguy said.

Other indicators are also positive even in the current environment, Khater said.

"Despite elevated rates, homebuilders are displaying renewed confidence in the housing market, focusing on the fact that there is a good amount of pent-up demand, an ongoing supply shortage and expectations that the Federal Reserve will cut rates later in the year," Khater said.

Taking a more pessimistic view is Jack Macdowell, chief investment officer at the Palisades Group, an alternative investment manager.

"Mortgage rates remain too high to entice homeowners with an average interest rate of 3.8% to sell their homes," Macdowell said in a Thursday morning statement after the existing home sales report came out. "This disparity creates a situation where there is pent-up demand (due to the higher prevailing rates discouraging new buyers) and pent-up deferred sales (since current homeowners with lower rates are less inclined to sell, keeping supply low)."

And inventory is likely to remain low for some time to come, Macdowell said.