Fear of Higher Mortgage Rates Heating Up Home Buying
Posted
on Tuesday, January 18, 2022
in
Mortgage Lending
A fear of increasing mortgage rates may have potential home buyers nervous that their affordability window may be closing quicker than expected.
Winter is historically the slowest season for the housing market, but mortgage demand from buyers is still high. According to the Mortgage Bankers Association’s seasonally adjusted index, purchase loan application volume rose last week by 2% compared to the prior week.
Supply also normally increases in December, but it didn’t last month. These two indicators align with anecdotal comments received from local real estate agents who indicate they are experiencing higher-than-normal January demand as well.
Freddie Mac Chief Economist Sam Khater said this week, “Economic data suggests that the economy remains on firm ground, particularly cyclical industries like manufacturing and housing. While we do expect rates to rise, the push of the first-time homebuyer demographic that’s been propelling the purchase market will continue in 2022 and beyond.”
Realtor.com Chief Economist Danielle Hale said, “With rates and home prices both rising, hopeful buyers will need to be prepared to contend with today’s housing market. In addition, buyers will likely face stiff competition, especially early in 2022, as rising mortgage rates spur some to hasten home-buying plans."
If you’re interested in buying while current mortgage rates remain low, speak to one of First National Bank’s home loan experts and get all of your questions answered.
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