Mortgage interest rates climbed to their highest level since 2014 last week, and consumers are rushing to lock in rates before any further increases, the Mortgage Bankers Association reported Wednesday. The average on a 30-year fixed-rate mortgage rose to 4.46 percent, from 4.36 percent the week prior, the MBA reports.
Total mortgage application volume, including both home purchases and refinancings, increased 3.1 percent last week from the previous week on a seasonally adjusted basis, the MBA says.
Applications still remain 12 percent below a year ago, mostly attributed to a lower level of refinancings occurring today. But last week refinancing volume rose 4 percent higher to nearly 46 percent of total applications, according to the MBA.
"Surprisingly, refinance application volume increased for the week, perhaps a sign that homeowners see rates moving away from them and are moving to lock in now before rates increase further," says Mike Fratantoni, the MBA's chief economist.
Applications for home purchases increased as well, up 2 percent last week and 6 percent higher than the same week a year ago.
"February's job report showed strong job growth and faster wage growth,” Fratantoni says. “We expect that the benefits from growing household incomes will continue to outweigh the headwind of slightly higher mortgage rates. We continue to forecast strong growth in home sales this year."
Source: “Mortgage Applications Rise 3.1% as Borrowers Rush to Lock in Rates,” CNBC (March 15, 2017)