Mortgage Demand Up Despite Rising Rates
According to the Mortgage Bankers Association's Weekly Applications Survey, average mortgage rates rose again last week. In fact, increases were seen on 30-year fixed-rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year loans. But, despite rising rates, purchase application demand – or the number of potential home buyers requesting applications for loans to buy homes – is still up 8 percent over last year at the same time. That means, home buyers are out in force and possibly looking to get a jump on the spring season – and potentially higher rates. Mike Fratantoni, MBA's chief economist, says rates will likely continue to rise. “A strong job market, accelerating wage growth, and expectations of faster rate hikes from the Fed all have played roles in pushing up longer-term rates,” Fratantoni said. That means, as long as the economy continues to improve, we will likely see steadily increasing interest rates. However, though higher than they've been, rates are still low by historical standards. The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.