Consumers Start To See The Risk

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Reuters reports on the rush by consumers to lock in mortgage rates. Here's an excerpt:

U.S. mortgage applications increased for a second consecutive week, reflecting a rush by consumers to lock in loans as interest rates rose to a near four-year high, an industry trade group said Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity for the week ended March 31 increased 7.2 percent to 612.8 from the previous week's 571.7.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.49 percent, up 0.13 of a percentage point from the previous week, its highest level since the week ended June 14, 2002, when it reached 6.53 percent.

The 30-year fixed-rate mortgage, the industry benchmark, was more than 1 percentage point above its 2005 low of 5.47 percent of June last year. The rate's 2005 high was 6.33 percent, reached in November.

The MBA's seasonally adjusted purchase mortgage index -- widely considered a timely gauge of U.S. home sales -- rose to 438.2, up 8.4 percent from the previous week's 404.1 but below its year-ago level of 446.0.

-- The Boy in the Big Housing Bubble/Los Angeles and Beyond