The answer: Lenders are overwhelmed with homeowners looking to refinance. Lenders had been shedding employees over the past 18 months in anticipation of rising rates and thus lower demand for loans. The sharp drop in rates due to coronavirus fears in turn caused a sharp increase in demand for loans and stretched lenders capacity to the max. In order to try and slow down the demand for loans, many major lenders have opted to increase rates in an effort to dissuade mortgage applications.

Here’s the good news. Economists predict that rates will remain low, and possibly trend downward for the foreseeable future. This is because forecasts predict that 1.2 trillion in refinances will be written this year, double the previous forecast. So if refinancing activity begins to slow, then rates will begin to trend back downward.

But what about the markets? Currently markets are in the most volatile period since 2008. The Dow, S&P 500 and Nasdaq has been sent into bear-market territory. This could certainly affect rates in the near future, but if consumer confidence remains strong, a strong housing market could be a bright spot in this rocky economy.