As predicted, with the rollout of the COVID vaccine mortgage rates have rebounded the to their highest level in two months. Rates are currently at 2.79%, compared to the 2.65% a week ago.
Now is the time to act if you have been waiting on the sidelines waiting to refinance your current loan. It’s not likely getting much better than this, but unemployment is still high and keeping many from qualifying for a loan or refinance.
Rates this high were last seen mid-November of last year, and while this is bad news for consumers, it’s important to look on the bright side of it, the sudden spike exists as a sign that the economy has begun to recover.
For those who currently can no longer qualify or afford a mortgage, soon your income will likely rise, and you will be able to qualify to buy or refinance a house again.
The sudden rise in mortgage rates is attributed to fears about inflation driving the 10-year treasury yield up, reaching 1.15% on Tuesday, then dropping to 1.1% the day after. Since mortgage rates tend to closely follow the 10-year treasury yield, it’s important to understand that the driving force behind changes is no longer fears about the coronavirus, but has returned to standard economic concerns like inflation and an increase of supply.
As a consumer, options are becoming more and more limited. With many discovering that the rates aren’t likely getting any better than this, refinance applications have increased, now taking up 74.8% of all mortgage applications.
For those who are currently left out due to employment and income these will both increase with the dying of COVID-19. It is a good idea to become familiar with the guidelines and be ready to submit an application as soon as your income becomes steady again. This way you can lock in a rate sooner than later as rates climb higher.