Strong purchase demand offsets slip in refinancing

While interest rates have continued to show incremental rises over the past several weeks, demand for home purchases remains strong, according to the Mortgage Bankers Association.

The MBA says that the average interest rate for a 30-year fixed-rate mortgage increased slightly from 4.46 percent to 4.5 percent for the week ending November 19. However, the effective rate - what borrowers could expect to actually pay - fell slightly, thanks to a reduction in points from 1.12 to 0.88.

At the same time, mortgage applications increased by 2.1 percent over the previous week, as strong purchase gains outweighed a slip in refinancing. Purchase applications jumped by 14.4 percent - reaching their highest levels since early May, when the homebuyer tax credit was still in effect.

"The increase in purchase applications last week aligns with other incoming data suggesting that consumers are feeling somewhat more confident with their financial situation," said Michael Fratantoni, MBA's vice president of research and economics.

That feeling of increased confidence has carried over to buyers who are looking at Houston homes. A recent Gallup poll found that consumers are increasingly confident about the economy this month.