According to the Mortgage Banker’s Association (MBA) seasonally adjusted index, applications to purchase a home rose 2% last week as compared to the previous week. Analysts are linking this increase to mortgage rates hitting their highest levels since March of 2020, with potential homeowners looking to maximize their buying power in fear that rates will continue to rise. MBA went on to note that realtors have also indicated that they are experiencing higher volumes of potential buyers as compared to previous Januarys.
Joel Kan, an economist with MBA, stated that despite rising rates, the housing market is off to a strong start to 2022. Both conventional and government applications have shown increases, with FHA applications rising 9%, and VA applications rising 5%. On the flip side, due to rising rates, refinance applications continue their downward slide, reaching their lowest level in a month, and are 50% lower from this time one year ago. The big question is, where do rates go from here? Seems that most analysts expect that rates will continue to trickle higher, but not at the pace we have experienced recently, and will hopefully begin to level off over the short term. That would be a welcoming sign for homebuyers as we are soon approaching the Spring market.