Thursday, December 10, 2009

Mortgage Rates Post Modest Upticks

Last week’s post-Thanksgiving shopping rush also saw a surge in mortgage applications, with loan application volume up 8.5% week on a seasonally adjusted basis.

The boost in applications was driven primarily by refinance interest, and the MBA’s Refinance Index gained 11% from the previous week, while the Purchase Index was up 4%. New home loan applications were driven almost wholly by demand for government-backed loans from the Federal Housing Administration and other federal agencies.

But mortgage rates rose modestly last week, to an average 4.88% from 4.79%, according to the Mortgage Bankers Association, ending a six-week run of declining 30-year fixed rates.

Mortgage rates have been at near-record low territory for the last couple of months, but the big question is what will happen next year, when the Federal Reserve is scheduled to end its purchase of mortgage-backed securities that has helped push rates down for much of 2009.

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