It looks like borrowers are breaking out of their fear, hesitancy, and the market finally products to help their financial needs. The Mortgage Bankers Association announced a 2.4% increase in applications and similar increases in the purchase and refinance indexes.
Quicken Loans’ expert attributes the increase to a combination of affecters:
Quicken Loans Chief Economist Bob Walters attributes the gains to historically low interest rates, an increase in the popularity of FHA loans, and some easing in the credit markets.
I can certainly agree with all of these factors at play, particularly a larger FHA impact than I expected.
However, I also think there is another significant trend pushing up applications: Borrowers finally coinciding to the realization that they have to “take the medicine” (higher interest rate and payment) they have been resisting to avoid alarming payment shocks in the near future.