The Mortgage Bankers Association (MBA) released its tallies of new mortgage activity Wednesday for the week ending December 3, 2010.

The trade group’s index of mortgage applications for the purchase of a home jumped 1.8 percent. This is the third weekly increase for the purchase index, which has reached its highest level since early May.

Mortgage interest rates have been steadily rising for several weeks now, and analysts expect the climb to continue. The fact that home purchase activity has been uninterrupted by the sustained hike in rates is likely an indication that buyers too are keenly conscious that the upward trajectory will carry on and realize the earlier they commit, the lower their borrowing costs will be.

MBA’s data covers over 50 percent of all U.S. residential mortgage applications taken by mortgage bankers, thrifts, and commercial banks, and it shows that the average contract interest rate for 30-year fixed-rate mortgages increased to 4.66 for the week ending December 3, up from 4.56 percent the week before. MBA says the 30-year rate has reached its highest mark since July.

The average contract rate for 15-year fixed mortgages came in at 3.98 percent last week, according to MBA’s study. That’s up from 3.91 percent the prior week. The 15-year rate is the highest it’s been since early September.

All market indicators point to further increases in borrowing costs for home loans. Data compiled by Bloomberg News shows that yields on Fannie Mae and Freddie Mac mortgage securities, which are closely tied to the direction of mortgage interest rates, jumped to their highest reading in almost six months on Tuesday.

While rising rates seems to have prompted some homebuyers to act now, mortgage refinancing, on the other hand, is becoming less attractive. MBA reports that refinance applications fell back by 1.4 percent last week. It’s the fourth straight weekly decrease for the group’s refinance index, which has hit its lowest level since June.

With refinances still making up about three-quarters of the industry’s mortgage activity, their decline lowered MBA’s index of total loan application volume by 0.9 percent compared to the previous week.

Buying your first home? Selling your house? Looking to relocate? Give me a call,   Carlos J. Amador at (714) 626-8880 ext 117 or visit my website For a no obligation free consultation. Free first time home buyer information for Fullerton, Orange County, and Los Angeles residents. Real Estate information for Fullerton, Orange County and Los Angeles residents. Home Sellers in Fullerton, Orange County, and Los Angeles.