Mortgage applications jump as rates rise
As so often happens, mortgage applications have jumped in the past week as rates have risen after falling for so long.
Freddie Mac’s weekly survey will be published tomorrow and the 30-year Fixed rate Mortgage will show an increase from last week. But the rates have already increased in the market and this has prompted buyers to move.
This CNBC article Mortgage demand jumps shows that demand for new purchases – as against refis – jumped 5% from the previous week and was 15% ahead of the same time last year, when rates were much higher.
In last week’s article Mortgage rates about to rise I wrote:
“The best outcome for both the US and the rest of the world would be an end to the tariff war, which would lead to renewed confidence, increased capital spending and continued economic growth. This, in turn, would increase the demand for money and lead to higher interest rates and higher mortgage rates. Higher rates would, in fact, be a positive sign for both the economy and the housing market.”
“Last week was a positive one and interest rates responded accordingly. As the 70th anniversary of the founding of the People’s Republic of China will be celebrated on October 1, it would be reasonable to expect only positive news between now and then. But the longer term issues remain to be resolved.”
The Federal Reserve is expected to cut interest rates today and I will write about that this weekend. But do remember that the Fed’s decision affects short-terms rates – credit cards, auto loans, adjustable rate mortgages, etc. – while fixed-rate mortgage rates are set by the market and priced in relation to the yield on the Us 10-year Treasury.
Market Analyst | Team Harborside | teamharborside.com
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