Purchase Mortgages Skyrocketing
The real estate industry is seeing a big boom – specifically, in purchase-mortgage applications.
What is a purchase-mortgage market?
This is a portion of primary mortgages devoted to loans for new home purchases. The remainder of the primary market is made up of refinancing transactions.
Most of the time, interest rates play a big role in which section of the mortgage market will rise or fall. When interest rates rise, borrowers are less likely to refinance, so the purchase-mortgage market becomes the ‘primary market.’ Likewise, if rates dwindle, refinancing might be the bigger pull for homeowners.
What’s currently happening in the market?
In general, mortgage loan application as a whole rebounded from last week, increasing by .3%. The specific loan that drove this increase came from purchase-mortgage activity, which increased by 8% from last week as well. It’s currently at its highest level since April 2021.
Currently the 30-year-fixed rate mortgage has been hovering just over 3%, which isn’t a big enough price point for homeowners to potentially create a refinance boom.
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