"Economic news in recent weeks has been mostly positive, especially in terms of GDP growth and increasing wages," said MBA economist Joel Kan. "This raises the likelihood of the Fed raising rates at its December meeting, but also indicates stronger domestic economic fundamentals, which pushes rates higher."
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to its highest level since June, 3.77 percent, from 3.75 percent, with points increasing to 0.38 from 0.36 (including the origination fee) for 80 percent loan-to-value ratio loans.
Mortgage applications to refinance, which are highly rate-sensitive, fell 3 percent for the week, seasonally adjusted, to the lowest level since May. Mortgage applications to purchase a home managed to eke out a 1 percent gain for the week and are now 11 percent higher than the same week one year ago.
"Applications for home purchase loans increased for only the second time in the past six weeks, but purchase activity in 2016 has generally been stronger than in 2015," Kan said.