The prospect of rising interest rates after the presidential election led many homeowners to refinance their mortgages in the third quarter, including those in the midstate.
Refinancing activity in the U.S. rose 16 percent in the third quarter compared to the same period a year ago, according to California-based ATTOM Data Solutions.
By comparison, refinancing was up 8 percent in the Harrisburg area over the same period and 14 percent in Lancaster County.
But since Donald Trump’s electoral victory last month, interest rates have steadily increased, which has hurt mortgage activity nationally.
The Mortgage Bankers Association said Wednesday that U.S. mortgage applications dropped 9.4 percent over the last week, while refinance volume was off 16 percent.
A typical 30-year fixed-rate mortgage was at 4.13 percent, according to MortgageNewsDaily.com. That’s more than half a percentage point higher from the average on Election Day.
How high rates might go as the nation adjusts to the new presidential administration is still anyone’s guess. Rates remain low by historical standards. And a Trump presidency could mean a looser lending environment, which could attract more borrowers, real estate professionals have said.
Higher rates can limit what buyers are able to afford, which may limit the pool of buyers in some price ranges.
The availability of homes in certain price ranges also may be limited in some areas as strong market demand in a low-interest environment has outpaced the number of homes hitting the market, including through new home construction.