After falling to new lows last week, uncertainty surrounding the economy drove interest rates higher, which could put many families relocation plans on hold.
The Mortgage Bankers Association's
report for the week ending November 12 showed the average interest rate for a 30-year fixed-rate mortgage jumped to 4.46 percent compared to just 4.26 percent the week before.
It's the first time rates have been that high since mid-September. Analysts said that questions about the Federal Reserve's quantitative easing plan, which was designed to lower interest rates and encourage spending, fueled the change.
"Rates increased sharply last week due to stronger economic data and lingering uncertainty regarding the structure and impact of the Fed's QE2 program," said Michael Fratantoni, MBA's vice president of research and economics.
In response to the rising rates, the number of mortgage applications dropped. While the decrease was most severe in refinancing applications - which fell 16.5 percent. Purchase applications fell by 5 percent, as many potential buyers choose to postpone their moving plans.
The rise in rates is not entirely unexpected. Earlier this year, the MBA's annual forecast warned that lenders were already anticipating the Fed's action, and already accounted for it - meaning that rates would rise up from their record lows in the coming months.