As the U.S. housing market enters a typically slow holiday period, an unusual surge in homebuying is driving up mortgage demand, CNBC reports. Applications to purchase a home rose for the third week in a row, causing a subsequent 1.8% increase in mortgage application volume last week.
As more buyers are priced out of a historically competitive housing market, a boost in homebuying activity is likely attributed to concern over rising mortgage rates, which could further reduce affordability.
Buyers may be rushing in during the usually slow holiday season because they are concerned that mortgage rates will move even higher than they have in the past month. Given how expensive homes are today, some buyers could be priced out if rates move much higher.
“The financial markets continue to discern the Federal Reserve’s policy path in the coming months in light of the current high growth, high inflation environment. Despite a fair amount of rate volatility last week, mortgage rates were higher,” said Kan, MBA’s associate vice president of economic and industry forecasting. “Borrowers continue to lock in mortgages in anticipation of higher rates in the future.”
Advertisement
Related Stories
Affordability
How Much Income Do First-Time Buyers Need to Afford the Average Home?
The median-priced home is unaffordable in 44 of the 50 largest U.S. metro areas
Affordability
What Is the Relationship Between Urban vs. Suburban Development and Affordability?
A new paper from Harvard's Joint Center looks at whether expanding the supply of suburban housing could, in turn, help make dense urban areas more affordable
Off-Site Construction
New Study Examines Barriers and Solutions in Manufactured Housing
The study from Harvard's Joint Center looks at the challenges faced by developers using manufactured housing and how they're overcoming those barriers