Mortgage Applications on the Rise

  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 

Get Off the Fence, It's Still a Great Time to Buy!

     Mortgage rates went up again last week and this gradual increase is to be expected over the next few months.  However, at an average of 4.18 percent, mortgage rates are still at a historical low.  If you are qualified and looking to stay in a certain area, right now is still a great time to buy!

     The Real Estate industry is one where the supply is limited and demand is always high, especially in larger cities where building opportunities are limited.  When there is more demand than supply, prices go up and long-term growth is inevitable.  

     When considering the rent vs. buy argument, even with rates going up, buying is the better financial decision.  Buying power does diminish when rates go up, so don’t wait for rates to get any higher.  Considering that a 1 percent increase can lose you approximately 10 percent in buying power, waiting to buy can mean missed opportunities.

     Preparation is key for buyers.  Get pre-approval and work with a realtor who specializes in the area you want to buy.  A full-time agent will be on top of new listings and can negotiate things into the contract to get more for your money.