According to multiple industry sources, mortgage rates have reached the highest point in recent months, and may continue to rise. This news may prompt those who have been waiting to refinance or purchase to take action now.
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Residential Mortgage Application Volume has Decreased
Recent months have seen a reduction in residential mortgage applications. There are varying speculations as to the reasons for this decline in applications:
- Waiting for Rates to Reduce Further
- Concerns over the Future of Economy
- Pandemic Resurgence Causing Hesitation
Anticipated Changes from the Federal Reserve
Many people working in the real estate and mortgage industry, as well as those considering buying or selling real estate, are watching the news and reports on expected changes from the Federal Reserve.
CNBC conducted a survey and share the results in this article written by Steve Liesman for CNBC:
High Demand and Low Inventory equals Increased Prices, Resulting in Reduced Home Sales
Mortgage loan applications for new home purchases dropped 9 percent in April 2021, and it was the third straight month of reduced application volume.
Millennials Are Largest Segment of Home Buyers for 8th Consecutive Year
According to reports from the National Association of Realtors (NAR), millennials represent 37 percent of all homebuyers this past year, and have made up the largest share of homebuyers for 8 consecutive years. Another interesting fact from the NAR is that many of the homes being purchased are considered multigenerational homes that will house adult siblings, adult children, parents, or grandparents.
Mortgage Rates Increase in February, creating the question: What’s Next?
Mortgage interest rate volatility continued in February with many lenders quoting interest rates higher than just a couple weeks earlier. Many home buyers and those seeking mortgage refinance are expressing concern about how high mortgage rates may increase this year.
Mortgage Refinance Loan Volume drops in Mid January 2021
Mortgage interest rates have begun to rise, and as a result January saw the first decrease in mortgage refinance volume since November 2020. The long running record of historically low rates may be news of the past after several weeks of rising rates.
Home Purchase Mortgage Applications up 42% in December 2020 compared to Prior Year
Home sales were strong throughout 2020, with purchase applications up 42% in December 2020 compared to same period in 2019. These results are much better than many projected in early 2020, when the Covid Pandemic brought our nation to a standstill for months. The historically low mortgage interest rates in 2020 is the clear reason for the stellar home sales market performance.
Keep Your Eye On: Now
There is a lot of talk and prediction about the future of mortgage interest rates and home sales prices. The variables that lie in the future for both of these topics will happen. What does this mean for those of us who are considering refinancing or purchasing a home? It means that interest rates and home prices may go up or may go down.
Home Purchase Demand Continues Strong
With many changes happening throughout 2020, one thing has remained consistent; the growth of home purchase demand. The combination of historic low mortgage interest rates and lowering available homes for sale, the pressure has created home purchase demand.