Mortgage rates once again surged upwards. The Mortgage Bankers Association's Loan Application survey this week said that demand for home loans in the first week of June fell 7.2% compared to the previous week,  as the average rate for a 30-year mortgage shot up 32 basis points to 5.57%. This is only the second consecutive week that average rates have exceeded 5.00%, but already they are at their highest level since November.

With mortgage rates at historic lows in recent months, demand for homes had been increasing and many analysts said there were signs of stabilization in the housing market. Rising interest rates, however, may encourage potential buyers to remain on the sidelines.

The MBA survey also said its Refinance Index fell 11.8% in the week, while the Purchase Index was able to advance 1.1%. Demand for refinance loans has been falling rapidly recently, accounting for just 59.4% of all applications last week, the lowest share of activity since November. In the prior week, 62.4% of all loans were refinance-related.

In the Charlotte area, there is still a great deal of apprehension in the housing market.  A tick upward in the interest rate is not what potential homebuyers want to see.  However, a sustained trend of low interest rates coupled with a bottom-out of declining home values are what we need to get the housing market back to pre-2006 levels.

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Chuck Webb

Charlotte, NC

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Wilkinson & Associates

Address: 8604 Cliff Cameron Drive, Suite 110 , Charlotte, NC, 28269

Office Phone: (704) 393-0048

Cell Phone: (704) 724-2454

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