As mortgage rates continue to rise, people are rushing to buy homes.
In a new report released by the Mortgage Bankers Association (MBA), interest rates jumped to their highest level this year. While CNBC reports that the spike spurred an application surge out of fear that rates will continue to rise in future weeks, the MBA attributed the increase to a seasonal rebound.
"Mortgage application volume rebounded strongly in the week following the Memorial Day holiday, indicating that the holiday had a larger impact on business activity than originally assumed," Mike Fratantoni, MBA's chief economist, said in a statement. "Strong job gains in May and initial signs of wage growth are supporting the purchase market."
On a seasonally adjusted basis, total mortgage application volume rose 8.4 percent week over week. Loan requests for new home sales showed the largest gain, up 9.7 percent, while refinancing applications increased 7 percent for the week.
Refinancing applications are at a lower level than they were two weeks ago, CNBC reported, and are down almost 5 percent year over year. On the other hand, purchase volume is up 15 percent year over year, indicating more buyers are entering the market.
According to CNBC, though the rush of applications are exciting some within the industry, analysts at Goldman Sachs are tempering the news with the fact that numbers are comparable to those of 1996, when both population and hosing stock were 15 percent smaller than they are now.
MBA reported that the average loan rate for a 30 year fixed rate mortgage grew 15 basis points to 4.17 percent, the highest since this past November. The rates for 15 year fixed rate mortgages were up from 3.27 percent to 3.37 percent and the rate for a 5/1 adjustable rate mortgage went to 3.06 percent from 2.97 percent.
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