An unrelenting surge in interest rates for home mortgages pushed borrowing costs to their highest level in two years, stymieing demand from potential homeowners, data from an industry group showed on Wednesday.
Interest rates on fixed 30-year mortgages rose for the ninth week in a row to average 4.68 percent in the week ended July 5, the Mortgage Bankers Association said. It was the highest level since July 2011 and a 10 basis point increase over the week before.
The surge in costs has been expected to push some undecided buyers into the market as they rush to lock in rates before they rise even more, but MBA's seasonally adjusted gauge of loan requests for home purchases fell 3.1 percent, the second-straight week of declines.
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Rates have been rising since early May, and the increase accelerated after comments from Federal Reserve Chairman Ben Bernanke last month that the central bank expects to wind down the pace of its quantitative easing later this year if the economy improves as expected.
The Fed has been buying $85 billion a month in bonds and mortgage-backed assets to keep borrowing costs low and stimulate economic growth. The historically low mortgage rates have helped lure in buyers as the housing market gets back on its feet.