Mortgage rates have bumped up to the highest they’ve been this year, which is effecting how people react to the market. Those that were on the fence have decided to strike while the iron is hot before it gets any hotter. The highest increase of interest rates this year has caused an influx of mortgage and refinance applications.
Seasonally adjusted, mortgage applications have increased 8.4 percent, refinance applications by 7 percent and applications to purchase a home have gone up 10 percent, based on a recent article on CNBC.com. Traditionally an increase in rates shows a slight decline in applications but, in this case, it breaks a streak of weekly declines we’ve seen throughout May. The average rate on a 30 year fixed loan is about 4.17%, the highest since November. Job growth is credited for supporting the home buying market.
Higher rates make home-buying more expensive, but buyers on the fence are making acting now before rates move even higher. The market is expected to cool down after this initial sharp jump, but rates aren’t predicted to get any lower.
Weekly Mortgage Applications Jump as Rates Surge | CNBC.com via Reality Check