However, brokers expect the Federal Reserve to buy more mortgage bonds and Treasuries to try and muscle rates back below 5%.

Keith Webb, of Associated Mortgage Professionals in Fullerton CA, said rates on a fixed loan up to the prior conforming limit of $417,000 are as high as 5.25%, up from less than 5% last week. Consumers can pay a one-point fee and get 4.875%, he said.

Webb said, “The worst part about this is that we're finally seeing the housing market show signs of recovery; if this rise in rates were to continue, it would stop the recovery dead in it's tracks."

But he expects the Federal Reserve to increase purchases of mortgage bonds and Treasuries to push down yields, which have climbed over the past few days.

On March 18, the Fed said it would increase its planned purchases of Fannie and Freddie’s mortgage bonds by $750 billion, to as much as $1.25 trillion, and also buy Treasuries. The yield on a 10-year Treasury fell to under 2.6% in March but has rebounded to 3.7% today.

Paul Miller, a partner with Laurus Mortgage in Fullerton CA, said earlier today rates jumped to 5% and then climbed again to 5.375%. He continued to see lenders adjusting their rate demands higher.

"I don't think I can remember a day where pricing had changed for the worse this drastically."

Here's to hoping the one thing that the government is doing correctly to stimulate the housing market doesn't stop, and they quickly realize that we need additional sources of downward pressure on interest rates.