Data shows that, despite a rise in mortgage rates, numbers of new home loan applications climbed by 0.6 percent last week from the week before. With many factors that could put buyers off in today's market, it seems that higher rates are not one of them.
The Mortgage Bankers Association (MBA) stated that there were also 18.5 percent more mortgage application last week than for the same period in 2015. It was also found that homebuilder sentiment has dropped in October, which could lead to a smaller inventory of houses that may fuel prices. Despite many builders reporting fewer sales and less traffic, many still expect sales to continue rising in the near future.
Refinance applications have dropped, however, as the refinancing market generally responds more sharply to interest rate changes. MBA chief economist Michael Fratantoni pointed out that the last time applications to refinance had been this low was the week the UK voted to leave the European Union.
Chief operating officer for Mortgage News Daily Matthew Graham warned that changes are still afoot. "It's tempting to conclude that the recent trend toward higher rates is over. But that would be a premature conclusion...bottom line, the past few days have been helpful, but everything could still change."
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