Homebuyers Undeterred by Rising Interest Rates: Mortgage Applications Surge Despite Highest Rate in Months

Despite the rise in interest rates, mortgage applications increased by 3.3% for the week ending April 12, according to data from the Mortgage Bankers Association. Even as the 30-year fixed-rate mortgage reached its highest level in months at 7.13%, borrowers were still eager to apply for loans, possibly to secure a mortgage before rates climbed even higher.

MBA Vice President Joel Kan mentioned that despite the rise in rates, borrowers were still motivated to apply for loans due to the strong economy and persistent inflation. He stated that homebuyers were acting quickly to take advantage of low mortgage rates before they rose further.

The majority of the increase in application volume came from purchases, which are still below last year’s levels by 10%. However, refinancing applications also saw a slight uptick during this period. This suggests that homeowners are looking to take advantage of low interest rates while they can.

Federal Reserve officials are considering keeping interest rates elevated for a longer period due to the stubborn inflation rates. Despite this, homebuyers were undeterred and continued to apply for mortgages at a higher rate, indicating their determination to secure a home despite rising interest rates.