WASHINGTON – Economists have predicted mortgage rates would start to rise the second half of 2003, but rates on 30-year mortgages already turned up the week of November 25 and that tremor had a ripple effect on the demand for refinancing loans among consumers. Rates on the 30-year mortgage rose 0.26 percentage points to 6% from Nov. 8th – Nov. 22. At the same time, applications for home loans in the U.S. dropped 5.8%. However, the number of applications was still almost 45% above the average for the year, and the Mortgage Bankers Association of America said that figure “is likely to stay high in the near term, supporting consumer spending and the economy.” The number of applications for refinance mortgages fell 8% the week of Nov. 22 compared to the previous week. MBA data showed that applications for mortgages to buy homes rose 1.5%, but the drop in refinancing applications dragged the overall number of home loan applications down 5.8%.

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