Demand for Home Loans Surges in Greater Boston Amid Rising Interest Rates
Despite mortgage rates exceeding 7% this year, demand for home loans is surging in Greater Boston. Leader Bank, a regional lender, has witnessed a 43% increase in loan applications compared to last year. While seasonal factors contribute to the uptick, the bank attributes the surge to its expanded sales team and the area’s limited housing supply.
The scarcity of homes has forced buyers to prioritize finding a suitable property over securing the lowest interest rate. Home sales have declined year-over-year due to the limited inventory, as buyers grow impatient waiting for interest rate cuts.
The Federal Reserve’s decision to maintain higher interest rates to combat inflation has dashed hopes of a near-term reduction in mortgage rates. Consequently, the 30-year fixed mortgage rate has risen significantly, prompting some buyers to consider alternative options.
Experts advise homebuyers to anticipate continued tight housing listings as homeowners remain in their properties due to higher mortgage rates. Additionally, home prices are unlikely to decline, and buyers may face bidding wars in certain cases.
While interest rates may eventually drop, it is unlikely to be as rapid as the post-pandemic surge. Buyers can explore adjustable-rate mortgages with lower initial rates and refinance when rates decrease. By doing so, they can secure affordable housing options in a challenging market.
