Mortgage interest rates saw another new low this week, according to Forbes senior contributor Amy Dobson. The 30-year fixed mortgage rate hit 2.86%, and the momentum suggests we will see at least one more new lowest rate as we approach the fall season.
With the decrease in rates, applications have continued to increase, even through the Labor Day weekend. For the week ending Sept. 4, both purchase and refinance applications increased 3%, but refinances continued to show dominance by making up 63.1% of the total number of applications.
The other record that was broken last week is the amount of money people are borrowing to buy a home. The MBA survey shows purchasers borrowed an average of $368,600 for their loan—which is the highest the MBA has recorded in the survey’s 30-year history. As rates have dropped, purchasing power has increased, with Redfin reporting that buyers who have a $2,500 per month budget for housing can now afford a home that is at least $30,000 more expensive compared to a year ago.
The rates might see some small fluctuations but they aren’t going to see any large increases for the next few months. The biggest hurdle continues to be lack of supply in popular markets. But if people are able to borrow more money, that could entice sellers to list their homes this year while they have a greater chance of selling at a higher asking price.
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