Glowing jobs report could spark interest rate increase

The recent release of an employment report showing strong growth may be the key behind the rise in mortgage applications, CNBC reported.

“There was an almost 11 percent increase in FHA refinance volume, as borrowers seek to refinance in advance of higher rates,” said Michael Fratantoni, chief economist for the Mortgage Bankers Association.

The strengthening jobs report offers a greater likelihood that the Federal Reserve will decide to raise interest rates next week, which may have prompted homeowners and buyers to rush in to secure rates now.

“This year’s housing market is poised to be the best since 2007,” wrote Doug Duncan, Fannie Mae’s chief economist. “However, consumers’ ability and willingness to purchase a home is likely to remain an issue in many regions going forward until we see consumer confidence in their income growth consistently gain traction.”