Menu
Banking Exchange Magazine Logo
Menu

Mortgage Rates Climb but Home Purchases Continue to Increase

The housing market is still thriving but the refinance market is slowing

  • |
  • Written by  Banking Exchange staff
  • |
  • Comments:   DISQUS_COMMENTS
Mortgage Rates Climb but Home Purchases Continue to Increase

Mortgage applications continue to grow with a 3% increase week over week as the market continues its month long winning streak.

The figures outpace last year by more than 25% and will continue to rise due to comparisons against the height of the panic in the coming weeks. Households continue to seek more living space, and first time home buyer demand is higher than it has been in a decade, both positive effects on the housing market from the pandemic, particularly in major suburban areas of the country.

Since much of the United States market has had relatively slow growth in recent history, the spike in prices is a welcome sign to homeowners in the market. However, as interest rates increase affordability could be a concern in the near future, say some analysts.

Fixed rate mortgages increased from 3.28% to 3.36% last week, which is expected to steadily continue in accordance with Treasury yields. The trend started several months ago, which has led to a major decrease in refinancing. The majority of lending applications come from the refinancing market.

The rental market for landlords has been negatively impacted by the federal ban on evictions, with smaller landlords looking to sell properties. Relief bills seem to target renters first and foremost rather than the owners. Landlords cannot directly request relief in many markets. The tenant must file on behalf of the landlord to show that he/she cannot afford to pay rent in some key markets.

The CDC recently extended the ban for another quarter, ending in July. Smaller landlords without access to emergency funding will continue to be forced to sell. The unintended consequence may be stricter tenant applications, and a less appealing market for multi-family homes.

Analysts are concerned that the net outcome will be a more difficult rental market for low rent housing, the very people the eviction ban is looking to help.

Marilyn Blackburn, a landlord in Washington state for 20 years, has decided to sell her nine rental properties as soon as she can.

back to top

Sections

About Us

Connect With Us

Resources

Webinar — Leveraging Open Banking Trends to Transform Your Institution

Time/Date: October 5th, 2:00 CT

The concept of open banking is ushering in exciting new possibilities for financial institutions of all sizes, transforming how they do business and driving new revenue opportunities. Join Shane Ferrell, Vice President of Product Strategy and Director of Software Engineering Barkley Hughes as they answer these questions and more: 

• What is open banking, and how does a financial institution take full advantage of this rapidly growing technology?

• What are key areas to look for when considering leveraging a third-party technology or an open banking marketplace?

• What role does FDX play in the future of open banking?

REGISTER NOW!

This webinar is brought to you by:
OneSpan logo