Mortgage rates showed a slight increase last week, according to the latest weekly survey  from the Mortgage Bankers Association . The average contract interest rate for a 30-year fixed-rate mortgage increased to 4.92 percent from 4.88 percent the previous week, although mortgage loan applications were still up 0.3 percent.
The refinance share of mortgage activity increased to 75.2 percent of total applications—the highest share since April—and the adjustable-rate mortgage share of activity is at it’s lowest since June, at 4.1 percent.
What kind of impact will this have on the home building market?
• Will mortgage rate increases stunt the housing market recovery? Federal Reserve policy makers meeting today may take recent data as an indication that the recovery is gaining strength while repeating a pledge to keep benchmark interest rates almost at zero for an extended period to push down an unemployment rate that’s forecast to exceed 10 percent through June, according to Bloomberg.
• Of course, neither home builders nor the government want mortgage rates to increase too dramatically, scaring away buyers who have been lured to the housing market by lower home prices, tax credits and record-low mortgage rates.
• Despite the increase, mortgage rates are still low. In fact, on a yearly average, mortgage rates have never been this low. It’s still a great time for buyers to take advantage, if they can, and for owners to refinance.