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Fear of Even Higher Mortgage Rates

January 15, 2022

“Mortgage rates increased significantly across all loan types last week as the Federal Reserve’s signaling of tighter policy ahead pushed U.S. Treasury yields higher,” said Joel Kan, an MBA economist. “The housing market started 2022 on a strong note. Both conventional and government purchase applications showed increases, with FHA purchase applications increasing almost 9%, and VA applications increasing more than 5%.”

FHA and VA loans are low and no down payment options often used by first-time buyers.

Applications to refinance a home loan fell 0.1% from the previous week and were 50% lower than the same week one year ago. Refinance volume is now at the lowest level in more than a month. As mortgage rates rise, fewer and fewer borrowers can benefit from a refinance.

Mortgage rates rose sharply on Monday of this week, according to Mortgage News Daily, but settled back slightly on Tuesday.

″The big question now is whether the worst is now over for this abrupt move toward higher rates. The answer is a definitive ‘maybe!’ It might even be ‘probably,’” wrote Matthew Graham, chief operating officer at Mortgage News Daily. “Unfortunately, that doesn’t mean rates can’t go higher, simply that the pace may be moderating from here.”

Tags: #Mortgage

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