Higher Borrowing Costs May Increase Next Year

Some mortgage forecasts predict that higher borrowing costs will lead to higher interest rates.

As American have been benefiting from low interest rates this past years, that will soon come to an end. According to Yahoo!, for the week ending Oct. 15, total mortgage demand — including applications to refinance and purchase homes — fell 6.3% from the previous week, the Mortgage Bankers Association (MBA) reported on Wednesday. Requests for loans to buy homes went down 5%, while refinance applications sank 7% from the previous week and were 22% lower than the same week a year earlier. “Refinance applications declined for the fourth week as rates increased, bringing the refinance index to its lowest level since July 2021,” says Joel Kan, the MBA’s vice president of forecasting. In the mortgage bankers’ weekly survey, the average rate on a 30-year fixed-rate mortgage reached 3.23% last week, the highest since April, Kan says. The average for a 15-year mortgage — a loan popular among refinancing homeowners — jumped to 2.54%, the highest since July.

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