Week Ending 02.15.08: Mortgage Rates Jump - Applications Down Nearly 23%

Increased concern of inflation caused mortgage applications to drop nearly 23% last week, according to the Mortgage Bankers Association. The MBA reported that the average application rate for 30-year fixed-rate mortgages had risen 37 basis points by last Friday to 6.09 percent, as a result. While updated rate surveys from are set to be released tomorrow, early evidence suggests rates have jumped even further to start this week - erasing nearly all of the rate drops that we have seen in less than two weeks time. Current 30 year FRM's are averaging 6.25% today while 15 year FRM's are averaging 5.75%.

Concerns of increasing inflationary pressures could be warranted. The U.S. Department of Labor released January's CPI report (Consumer Price Index), showing an increase of over 4% in pricing on consumer based products from January 07' numbers. This increase is the highest seen since January 06'.