New Loans Increase as Rates Claw Higher

New loan applications grew 2.2 percent last week as borrowers tried to lock in low interest rates, according to the Mortgage Bankers Association. The volume of mortgage applications reached its highest level since May; clearly the spike in mortgage rates motivated more homebuyers to act now.

The average contract interest rate for 30-year fixed-rate mortgages increased to 4.50 percent from a low of around 4.20 percent in the past couple months. Fear is a great motivator and may be just what the housing market needs.

For more on mortgages and homeownership see these AOL Real Estateguides:
Mortgage Jargon in Simple Terms
How to Get Pre-Approved for a Mortgage
Real Estate Terms and What They MeanHow to Get a Low Mortgage Rate