There is no doubt that it has been a busy week in the world of politics and news. Lost in all of this have been headlines that may have a great impact on the housing market as we move into the new year during these unprecedented times. Here are a few of the top headlines that housing experts will be watching in the near future.

Mortgage Rates Inch Upward, Spurring Refinancing Flurry of Activity

After a year in which mortgage rates plummeted because of a dire economic situation, these numbers are starting the new year out on an upward trajectory. This increase has predictably led many homeowners to lock in a new refinancing contract out of fears that the rates will continue to grow in the coming months. The average contract interest rate on 30-year fixed-rate mortgages rose to approximately 2.88% this week. This is up from 2.86% the prior week. This rate was also 99 basis points more than just a year ago.

As a result of the increase in rates, homeowners rushed to lock in favorable loan terms before they expand upwards. New applications to refinance an existing home loan increased 20% last week when compared with the prior week. This figure makes the highest level of new applications since last March. Total volume was also 93% more than one year ago.

Refinance applications were not the only number that saw significant growth in the first week of the year. Mortgage applications to purchase a new home were up 8% for the week. This figure was 10% higher than the same time period last year. It should be noted that new mortgage applications are generally less sensitive to weekly rate fluctuations than refinancing applications.

Why the Movement?

There are two key factors playing into the rise in interest rates. President-elect Joe Biden has been clear that he expects to provide an additional personal stimulus to eligible Americans after he takes office on January 20. With the Democrats winning both Senate seats in the Georgia special election, there is the expectation that Biden will be able to pass his stimulus package swiftly because his party will now have the tie-breaking vote.

In addition, the rollout of the COVID-19 vaccine is injecting a sense of hope into the economy. Together, these factors drove Treasury yields into higher territory, increasing interest rates in the process.

Biden Proposes Extension on Eviction Moratorium Along with Additional Housing Assistance

In an address to the nation on Thursday, Biden asked Congress to pass his proposed COVID-19 relief stimulus plan. Known as the "American Rescue Plan," this proposal includes a wide array of protections and stimulus designed to keep families in their homes during this unprecedented economic time.

Biden's proposal will ask Congress for $30 billion in rental assistance funds. This number is in addition to the $25 billion in aid that was approved at the end of the year. If passed, there will be another $5 billion to help those families that are at risk of becoming homeless. A fund to help those facing eviction secure legal assistance is another key element of the proposal.

Most notably, this proposal is asking lawmakers to extend the eviction and foreclosure bans until September 30. The current eviction moratorium is set to expire at the end of January, potentially putting a significant amount of people out on the streets.

According to the Center on Budget Policies and Priorities, nearly 20% of all renters were behind on their payments in December. This figure is amplified in the Black community, with 30% of this demographic reporting being behind on their rental payments. What is most concerning to health experts is that research has demonstrated that evictions translate to higher levels of COVID-19 infection rates. This is not surprising, as evicted individuals are forced to live in communal settings, increasing the spread of the virus.

Biden and his team say that the plan would help in keeping nearly 14 million people in their homes, despite being behind on rent. As a result, the country may be able to get ahead of the raging pandemic.