Interest rates on home mortgages jumped this week, raising questions about how much life is left in the refinancing boom.
The average nationwide rate on 30-year fixed mortgages was 8.39%, up nearly 25 basis points from the level of a week earlier, according to preliminary results of a survey by HSH Associates, Butler, N.J. In early September, the average rate was 7.89%.
Though demand for refinancings remains robust, lenders and analysts warned that further rises could kill the boom.
"Going up above 8.5% would really shut it off," said Linda Lowen, head of mortgage investment strategies at Smith Barney, Harris Upham & Co. "We would see the last surge of people who waited too long, and after that the thing would drop off precipitously."
Mortgage rates track long-term bond yields, which rose sharply this week. Analysts said the rise may have been caused by investor jitters about the inflationary effects of a Clinton presidency.
