Interest Rates Hit an Eight Month High

Freddie Mac announced Thursday that home loan interest rates for 30 year fixed rate mortgages increased to 6.32 percent this week, the highest it has been in more than eight months. The increase is said to be attributed to growing inflation concerns. The 15 year fixed rate mortgage also jumped, averaging 5.93 percent compared to 5.65 last week.

Top officials at Freddie mac said that Federal Reserve officials specifically indicated that the threat of inflation was the primary reason for the increase, and that it looks as though the Federal Reserve will raise interest rates more aggressively over the next year than previously thought.

Mortgage applications rose by about 10 percent from the lowest level in 6 years. home loan refinancing applications jumped from 8.4 percent while purchase applications rose 12.8 percent. Top officials at the National Association of Realtors say that regions of the country that have seen sharp price declines are now seeing a sales recovery, due to a large influx of bargain hunters.

Meanwhile, mortgage delinquencies and foreclosures continue to rise at a record high rate. Experts agree that part of the reason that applications are on the rise is because homeowners that are in over their head in debt are attempting to refinance Home loan.