Mortgage rates went up last week and have hit a six month high, 4.84%. I never had a shot at an interest rate that low. When I last purchased a home I would have been thrilled with a rate in the 6% range.
The rates went from 4.66% to 4.875%, and applications for new mortgages declined by 5%. Rates were higher were right around 5% on Thursday but went back down again. The Mortgages Bankers Association is reporting that applications for new mortgages decreased because of the rate increase. The up and down happened so fast I am going to go out on a limb and suggest that it did not reach the radar of many potential home buyers.
I think they decreased because of the holiday season, the economy and possibly the weather. One weeks worth of mortgage application data really isn’t enough to make a news story.
Do you think the 5% decrease in new applications is attributed more to the rate increase or because it’s Christmas time and buyers are reluctant to do anything until 2011?