Industry NewsMarkets & Economy

Mortgage applications surge — but so do interest rates

Rising borrowing costs may be enticing potential homeowners to buy now

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The Mortgage Bankers Association touted an 8.4 percent spike in mortgage applications this week — even as interest rates hit their highest numbers since last fall. According to the MBA’s Weekly Mortgage Applications Survey, mortgage application volume rebounded strongly following the Memorial Day holiday. Comparing volume over the past two weeks, purchase activity is up more than 6 percent, while refinance activity is down 5 percent. The MBA attributed the boost to the holiday’s impact on business activity, strong job gains in May and the beginning signs of wage growth. However, current interest rates may tell another story. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.17 percent, its highest level since November 2014, up from 4.02 percent. Those 30-year fixed-rate mortgages backed by the Federal Housing Administration increased to 3.9 percent, also the highest level since November ...