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Mortgage applications up 5.5%, as fear of rising rates triggers homebuying surge

A postelection spike in mortgage rates may have scared potential homebuyers enough to push them off the fence and into a contract before rates move even higher.

A rush on home-purchase mortgages fueled application totals to a 5.5 percent gain on a seasonally adjusted basis last week versus the previous week, according to the Mortgage Bankers Association. Volume was nearly 10 percent higher than the same week one year ago.

Homebuyers were entirely behind the increase, with applications to purchase a home jumping 19 percent on the week, seasonally adjusted. Purchase volume had been weak prior to the election, even though mortgage rates were near historic lows. It is now 11 percent higher than a year ago.

"The increase in purchase activity was driven by borrowers seeking larger loans, with applications for purchase...