As brokers we look at various indicators concerning the overall marketplace. For the week ending June 31, 2015 we witnessed a spike in mortgage applications of 4.7% overall with refinancing jumping 6% for the week. Part of the activity can be attributed to lower rates for the week as rates on a conforming loan i.e. $417K or less was at 4.13% for a 30-yr, the lowest rate since May of 2015. Concerning re-fi, again low rates spur activity.
Related many banks reported the easing of lending standards which in turn facilitates additional mortgages into the marketplace.
While clients are watching the financial markets (and the actions and forecasts of the Federal Reserve) a rate increase is somewhat inevitable baring a severe economic downturn the reality is even if rates tick up 50 basis points, rates will still be at historic lows.
When I purchased in Cherry Creek North back in 1989 not only did I have to come up with 20% down (attached row house considered more risk), but I was also at a mortgage rate of 8%+ on a 15 yr mortgage. Thus for those considering a mortgage at present, rates in the 4-5% are historically low and should be taken advantage of.
One caveat, historically when rates rise, prices stabilize and can fall. I am hearing from peers many buyers are “taking a breather” and waiting for rates to tick upward anticipating that prices will retreat. While I am not a forecaster, I am somewhat agreeable to the scenario as well.