Mortgage applications are up as rates go down

Mortgage applications jumped 1.2% from June as interest rates for 30-year fixed mortgages continue to moderate. The refinance business has also ticked up 2% while still down dramatically from last year.

Even in the face of inflation and the questions around whether the U.S. economy is in a recession or not, these numbers show there are glimmers of hope out there. Let’s see if it continues.

Are ARMS an option?

Adjustable Rate Mortgages are making a bit of a comeback.

In the simplest terms, an ARM allows homebuyers to lock in a rate for 5, 7 or 10 years after which the rate could be adjusted up or down.

Currently the rate for a 5-year ARM sits at 4.9%.* ARMs tend to be a good option for young, single buyers looking for a starter home or condo. ARMs can also lessen the financial burden for couples expanding their family. For homeowners expecting to move within 5-to-10 years because their job, ARMs make a lot of sense. The bottom line is, ARMs are smart way to lock in a lower rate today, and they offer homeowners the flexibility to refinance to a conventional fixed rate mortgage should rates go down in the future. It’s not a surprise that home buyers want additional flexibility when it comes to mortgages in the current environment.

Home rentals keep jumping

No doubt the pandemic and remote work had people rethinking where they wanted to live.  Higher interest rates and increasing property values forced a lot of would-be homebuyers to look into renting, and that has caused the home rental market to dramatically increase.

Today, the average rent for a single family home clocks in at $2,495 a month. That’s a 13.4% increase from 2021. While that’s a national average, coastal cities have a lock on the more expensive rents.

All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Guaranteed Rate does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Guaranteed Rate. Guaranteed Rate its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action. 

Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply.

* National average rates accurate as of 8/3/22 from Mortgage News Daily and are not advertised rates from Guaranteed Rate. 

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