Mortgage rates surged to the highest levels in a year as Ben Bernanke’s QE2 plan to reduce mortgage interest rates has backfired and is blowing up in his face. Shockingly, mortgage applications continue to plunge. Could it be higher rates and plunging home prices? Do you smell another save housing plan coming from Washington DC?
The average contract interest rate for 30-year fixed-rate mortgages increased to 5.13 percent from 4.81 percent, with points decreasing to 0.84 from 1.02 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the highest contract 30-year rate recorded in the survey since the week ending April 9, 2010.