Demand for riskier mortgages rises as rates climb

Mortgage rates moved slightly higher last week, keeping overall demand for home loans subdued, according to the Mortgage Bankers Association. The average rate on a 30year fixed mortgage with a conforming loan balance rose to 6.79% from 6.78%, while applications to refinance fell 1% from the previous week and were 19% lower than a year earlier. At the same time, more borrowers turned to adjustablerate mortgages, which typically start with lower rates but can change later. The MBA said the ARM share reached 8%, its highest level in five weeks, as some buyers looked for lower monthly payments in a higherrate environment. Purchase applications increased 2% week over week, though they were still slightly below the same period last year. Analysts said higher borrowing costs and broader concerns about inflation and deficits have kept mortgage rates near recent highs, limiting refinancing activity for most homeowners.