Dive Brief:

• Following a 9% dip in the number of applications for new home loans in May, a jump in interest rates to their highest level so far this year caused a surge in applications for mortgages last week, according to the Mortgage Bankers Association.

• The volume of mortgage applications rose 8.4% last week, up 15% from a year ago, the MBA reported. Refinancing applications increased by 7% for the week, which is 5% lower than the volume a year ago.

• The average interest rate for a 30-year fixed-rate mortgage last week was 4.17%, the highest since November. Interest rates are expected to continue to rise slightly in the short term. Bankrate reported a rate of 4.03% for the prior week.

Dive Insight:

It seems counterintuitive that more homebuyers would rush to the bank during a week when interest rates shot up. But that’s not unusual, as a rate hike often pushes undecided buyers off the fence and into their new homes.

The reason: They fear rates will continue to rise, and they want to lock in today’s rate in anticipation that tomorrow will make their loan more expensive.