With interest rates on the rise, more lenders are opening up the amount of loan credit they provide. The index that tracks mortgage credit availability around the country showed a 0.8% rise in December, its highest since last May.
That increase is driven by the rise in programs that help borrowers afford today’s high costs, like adjustable-rate mortgages and loans with lower credit score requirements.
Better Mortgage provides adjustable-rate mortgages (ARM) through their simplified, digital platform. ARMs come with a lower rate than the more popular fixed-rate loan. It’s set for a period of time—usually 5, 7, or 10 years. Then the rate adjusts based on where the market is at that time. If you’re planning to sell or refinance in that period, then it may bring huge savings.
Mortgage rates made a big jump last week. The 30-year fixed rate average is now at 3.45%, up nearly a quarter of a percentage point from the week before.
The market is responding to the Federal Reserve’s recent signal that rate hikes may be sooner than expected. But the rise isn’t deterring homebuyers. In fact, many have been spurred to apply for loans before rates can jump further. Applications to buy a home increased 2% week-over-week, with a 1-.4% jump in mortgage applications across the board.
Homeownership has long been a milestone for achieving success and economic stability in America. But mortgages—the tool many people use to reach it—have only been around for a couple of hundred years.
In fact, so much of the way we borrow, lend, and regulate mortgages is based on past precedent. To illustrate that, we looked at some of the biggest historical events of the last 100 years.
If you’re thinking about buying a home, or already own one, read the history of the American mortgage to better understand where we are economical—and where we’re likely to go next.