Mortgage rates hit four-month high

After approaching all-time lows just a few weeks ago, the latest report from the Mortgage Bankers Association finds that interest rates for Houston homes are now back up to levels last seen over the summer.

According to the report, the average interest rate for a 30-year fixed-rate loan for the week ending December 3 was 4.66 percent, up from 4.56 the previous week. The hike translated to the fourth straight weekly rate increase, and was the highest point for the survey since July. Rates of 15-year FRMs also gained, reaching levels from September.

However, the slowly rising rates were not enough to deter many potential buyers from jumping on low home prices, as the MBA's measure of mortgage purchase applications increased 1.8 percent compared to the previous week, rising back to levels found in May, when the homebuyer tax credit was still in effect.

At the same time, the number of refinance applications continued its slide for the fourth straight week, dropping 1.4 percent. The four-week moving average for refinancing applications is now down 10.9 percent.

While rates have continued to rise, many economists say that they should soon level off. A 2011 forecast by Freddie Mac's chief economist Frank Nothaft predicted that standard mortgage rates should remain below 5 percent throughout 2011.