Mortgage rates have been a hot topic since the election with speculation about how Trump’s policies would affect the real estate market. With rates already rising post-election, many speculated that buyers might retreat. As CNBC reported last week, January saw another jump in the rate and it didn’t seem to phase buyers at all!
“Mortgage rates moved solidly higher last week, but lenders saw no letup in loan demand. Mortgage application volume rose 4 percent from the previous week.”
Another thing that inched up higher in January was the refinance volume, as speculation that Trump would reverse Obama’s deduction in the FHA mortgage insurance premium circulated. That, in fact, did come to pass on Trump’s very first day in office. Even so, the FHA applications continued on…
“The FHA share of total applications increased to 13.6 percent from 13.1 percent the previous week, but that is likely to fall back next week. Mortgage rates also moved higher, but that didn’t cut into refinance demand.”
How are mortgage rates looking now after the first hike of the year?
“While this was the first rate increase in January, rates remain about 10 basis points lower than four weeks ago,” said Lynn Fisher, MBA vice president of research and economics.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,000 or less) increased to 4.35 percent from 4.27 percent, with points decreasing to 0.30 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio loans.”
Despite rate increases, mortgage applications rose 6 percent from the previous week, while still trending only marginally ahead of last years numbers. In the wake of the new administration, daily news is sending mortgage rates on a roller coaster ride, while home prices continue to increase. Demand for homes far outweighs supply so far this year and should rate increases continue along with prices, the real estate market is sure to see home struggles this year.