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Mortgage Applications Rise, Despite Rising Interest Rates

Average rates for a 30-year Fixed Rate Mortgage moved upwards last week, but demand for loans; Refi's as well as Purchases, continued to increase, providing further confirmation that the housing market is stabilizing.

The Mortgage Bankers Association (MBA) said interest rates for a 30-year Fixed Rate loan moved up 9 basis points from a six-week low to 5.25% in the week ending August 21.

With rates still broadly low, refinances increased to their highest level since early June with a 12.7% gain ? the third advance in the past four weeks, including a 6.9% gain in the prior period. That helped the Market Composite Index ? which tracks the volume of mortgage applications ? to advance 7.6%, a nice touch to the 5.6% gain in the week before.

In addition, the Purchase Index continued to rise for the fourth consecutive week, jumping 1.0% to put the 4-week average at +1.7%. 

“This marks the fourth consecutive weekly gain – the first time this has happened since March, when fixed mortgage rates first dropped and stayed below 5 percent,” the report said.