Mortgage Rates Post First Increase in Six Weeks

By:
Kara Johnson | October 20, 2010

Mortgage interest rates jumped last week, posting their first increase in six weeks and cooling demand for new mortgages. 

Average interest rates on 30-year and 15-year fixed-rate mortgages were up sharply, with both increasing by at least a dozen basis points, according to the weekly survey released this morning by the Mortgage Bankers Association. The average rate on the 30-year loan rose to 4.34 percent last week, up from 4.21 percent the week before, and the average 15-year rate increased to 3.74 percent, up from 3.62 percent previously.
 
The previous week’s figures were record lows in the MBA survey for both mortgage types.
With rates rising, mortgage applications fell 10.5 percent from the previous week, including an 11.2 percent drop in refinance applications. Applications for mortgages to purchase homes also fell, by 9.7 percent. All figures are seasonally adjusted.
 
Refinance applications currently make up more than four out of five new mortgage applications, according to the MBA.
 
The MBA survey covers the week ending the previous Friday, with interest rates based on mortgages with an 80 percent loan-to-value ratio.

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