After many months of record low mortgage rates, we now are experiencing costs slowly beginning to rise in 2021. This upward climb lit a fire under potential borrowers to take advantage of record-low rates while they were still available.
Consumer Fear
The fear of missing out spiked mortgage applications to increase by 20% last week. Homeowners who did not take advantage of refinancing rose to the opportunity to apply within the first few weeks of the New Year. According to Mortgage Brokers Association’s seasonally adjusted index, January hit the highest level of applications since March. The possible cause of the rise in treasury yields and rate increases can be due to the expectation of additional fiscal stimulus from the incoming administration, and the rollout of Covid-19 vaccines improving the outlook for the coming year.
If you haven’t yet taken advantage of record-low rates, now is your chance!
Booming Activity
The booming refinance activity is still set to stay on an upward trend, even though mortgage rates will continue their ascending trajectory this week, following the rise in bond yields. Much of the surge is due to the Democrats win in Georgia, which shifted control in the U.S. Senate. For now, we may see a persistent setting of record low rates being replaced by a healthy respect for a rising rate environment.