In February of 2022, experts saw an increase in the number of borrowers applying for a home loan. Though the number was lower than last year, mortgage applications to purchase a home increased 4% during the first week of February. This may sound shocking since mortgage rates are on the rise. But there are many good reasons why borrowers are pursuing a home purchase. Let us explain.
Reasons Why More Borrowers are Applying for a Home Loan
Recently, there has been an increase in the number of people applying for both new home purchase loans as well as home refinances. But why the sudden uptick? After all, mortgage rates are higher than they were last year.
Here’s why buyers are rushing to submit their applications.
Rates are Continuing to Rise
Rates may be higher now than they were last year, but they’re also not expected to drop anytime soon. Experts are saying that rates will continue to rise throughout 2022. Buyers who were hesitant at first may be feeling like now is their last chance. This could explain the recent uptick in home loan applications.
Home Prices are Going Up
Right now, there’s a major shortage in the number of homes available for purchase. This combined with the increase in material costs has resulted in a surge in home prices. And while home prices are high now, they’re only expected to get higher. It’s unknown when the housing shortage will end. Buyers who had any hope of purchasing a home in the near future are realizing they must act quickly.
Rents are High
The housing shortage has made finding a home difficult for buyers and for renters, too. Because there is a shortage of available homes for rent, renting is becoming extremely expensive. People who were once comfortable renting are now realizing that it makes more sense for them to purchase a home because their mortgage payments would be more affordable. On top of this, purchasing a house would allow them to build equity and, in many cases, have access to better, more spacious living conditions.
Ready to Buy? Let Us Help!
Mortgage rates are rising, but now is still a great time to buy a home. Whether you’re interested in refinancing your existing mortgage or purchasing a new home, Mortgage Solution Financial is here to help. Call our office today to get advice on how to apply for a home loan or speak to an expert about your options. We look forward to hearing from you soon!