Homebuyers Flock to Market Thanks to Prolonged Higher Interest Rates

The Mortgage Brokers Association reported that mortgage loan applications increased for the second consecutive week, despite a rise in interest rates. The application volume went up by 3.3% for the week ending on April 12, even though the 30-year fixed-rate mortgage reached 7.13%, its highest level since December.

Joel Kan, the MBA vice president and deputy chief economist, noted that even with higher rates, borrowers were still applying for mortgage loans. This increase in application activity could be due to some borrowers wanting to lock in rates in case they continue to rise. Homebuyers were encouraged by the strong economy, although inflation was proving to be more persistent than initially expected, leading Federal Reserve officials to consider keeping interest rates higher for a longer period.

The majority of the rise in application volume was from purchases, which are still 10% lower compared to the same time last year. Refinancing also saw a slight increase in applications. Overall, the real estate market is showing resilience despite the higher interest rates, with borrowers still looking to secure mortgage loans for home purchases.