According to the Mortgage Bankers Association (MBA), its seasonally adjusted index of mortgage applications which includes both purchase and refinance loans rose 0.5 percent for the week ended March 5.
The rate on a 30-year fixed-rate mortgages, excluding fees, rose 0.06 percent from the previous week to an average of 5.01 percent.
Analysts expect mortgage rates to rise considerably as the Federal Reserve stops buying mortgage securities by March 31st.
“The Fed will likely take a step back to see if the private sector steps up and starts purchasing the bonds,” said Bill Emerson, CEO of Quicken Loans.
“If they do not, mortgage rates could move higher.”
Home prices on the other hand will probably not rise any time soon given the large inventory in the market.
Now in regards the refinance market, the MBA’s seasonally adjusted index of refinancing applications decreased 1.5 percent last week.
The fixed 15-year mortgage rate averaged 4.32%, up from 4.27% the previous week.