Applications for refinancing down, purchases up as interest rates rise

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Applications for home loans declined by more than 16% last week as interest rates rose, the Mortgage Bankers Assn. said in a survey today.

As expected, the drop-off occurred in people seeking to refinance their homes because the benefits of refis are driven by interest rate trends.

The trade group said the average rate for 30-year, fixed-rate mortgages jumped from 4.81% a week earlier to 5.25% -- the biggest weekly increase since October 2008. Typical points charged, including the origination fee, decreased from 1.28% to 1.02% of the loan amount for mortgages amounting to 80% or less of the property value.

The average rate for 15-year, fixed-rate mortgages increased to 4.8% from 4.44%.

Interestingly, applications to purchase homes rose more than 4%, the mortgage bankers said. If you think now is the time to buy, a rate in the low 5% range still looks pretty good.

-- E. Scott Reckard