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This week has seen an upsurge of mortgage applications by 3.3 percent as was revealed by the Mortgage Bankers Association. This marks the week before the next Fed meeting said to be followed by rising rates. Yet the volume of mortgage applications is still 18 percent lower than this time of last year. This is mainly attributed to lower refinancing applications than a year ago when the interest rate was lower. But with a sudden rise in interest rates last week, 5 percent more mortgagors are rushing to refinance and close on their loans to avoid a longer wait than usual before the rates normalize.Prospective homeowners should lock their application within the next month or so to keep themselves on the safe side. If they don't, they might be forced to float for a lot longer than they planned with rising rates looming according to the Fed's February 22nd minute report which anticipates a leap in rates this month. This will be decided next Wednesday when the Fed meeting takes place.
More on the Fed’s last consensus can be found in this Mortgage Rates for March 2017 & Beyond article.
Since last week, the rate average for 15-year fixed mortgages rose by 2 basis points from 3.24 percent to 3.26 percent. The national average for 5/1 adjustable-rate mortgages is now 3.11 percent - up from 3.07 percent.
As for 30-year fixed rate mortgages with conforming loan balances ($424,100 at the most), the interest rate went up from 4.30 percent to 4.36 percent.
To get into more details concerning this jump in rates, visit Bloomberg’s article on the U.S. 30-Year Mortgage Rates Jump to 2017 High Before Fed Meeting.
This presents a problem for first-time home buyers because a substantial number of them are millennials (ages 18 – 34), leading to a high demand for mortgages but to a shortage of affordable options. The ones feeling the brunt of this shortage are first-timers with unsettled student debts. Potential homeowners with poor credit scores have fewer options than others.
Contact Info:
Name: Ali Shokri
Email: Send Email
Organization: Remodeling LLC
Website: https://remodeling.com/
Release ID: 177151