Dive Brief:

• Despite mortgage rates surging following the U.S. presidential election, purchase mortgage requests reported by real estate listing website Zillow have maintained their pre-election activity levels. The consistent figures indicate that potential buyers are still committed to their purchases even though interest rates are on the rise.

• The company said the average 30-year fixed conforming mortgage rate on the website has surged 55 basis points to 3.91% since early November and is nearing the highest level since early 2015.

• However, refinance requests on the website are down 32% compared to early November as the refinance market is more rate-sensitive.

Dive Insight:

Earlier this month, Black Knight Financial Services reported that the post-election pickup in interest rates is equivalent to a $16,400 increase in the average home price. Now, the company said, it takes 21.6% of the median income to buy a median-priced home, the highest share since June 2010 when rates were 4.75%.

Such figures have raised concerns that rising rates will damper forecasted growth in the housing market next year. The Federal Reserve is expected to raise short-term interest rates by one quarter of a percentage point during its meeting this week, a move that would impact mortgage rates and raise borrowing costs for homebuilders.

This, along with rising home prices, could also hamper the ability of first-time buyers to secure loans as lending standards may tighten back up while entry-level inventory shortages could be further impacted.

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