The rise in mortgage rates over the last few weeks has deprived homeowners of the chance to enjoy a refinance and discouraged new home buyers too.
Mortgage applications to purchase homes rose 3 percent. This has given a slight boost to mortgage rates but experts state that this rise still leave mortgage rates at the lower end of the scale. Owing to this, many renters are hurrying up and buying properties so that they don't miss out on the opportunity.
"Rates rose in response to stronger economic data and an increasing chance that the Fed may soon begin to taper their asset purchases," said Mike Fratantoni of MBA, in a statement.
Of late, the Federal Reserve has invested billions of dollars into the mortgage market, which has pushed the rate on the 30-year fixed conventional mortgage to 3.90 percent, the highest level in a year, dangerously close to the emotional 4 percent barrier.
"It's amazing to see the frenzied pick-up in home buying, as renters get nervous that both home prices and rates will rise quickly," said Craig Strent, CEO of Maryland-based Apex Home Loans. "They are trying to catch the beginning of the curve here."
"Among the Main Street set, there is little awareness of this month's change in mortgage rates, let alone the changes of this week," Dan Green, a loan officer with Waterstone Mortgage. "There's been very little panic among rate-shopping households. There's an acceptance, almost, a 'low rates couldn't last forever'-like attitude."
