An aerial view shows a subdivision that has replaced the once rural landscape on July 19, 2023 in Hawthorn Woods, Illinois
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Spring hasn't officially started yet, but the spring housing market already appears to be moving despite stubbornly higher mortgage rates.
Mortgage applications to purchase a home increased 11% last week compared to the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. Demand was still 8% lower than the same week a year ago.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased from 7.04% to 7.02%, with the point value for loans with a 20% down payment remaining unchanged at 0.67 (including the origination fee). lay.
“It is noteworthy that purchase volume – particularly for FHA loans – has increased sharply, once again demonstrating how sensitive the first-time home buyer segment is to relatively small changes in the direction of interest rates,” said Mike Fratantoni, senior vice president and chief economist at MBA. “Other sources of housing data show an increase in new listings, which is really positive for the spring buying season given the lack of inventory for sale.”
According to Realtor.com, there were 14.8% more homes actively for sale in February compared to the same period last year. Notably, homes in the $200,000 to $350,000 price range increased 25% year-over-year, outperforming all other price categories.
“The first few months of 2024 have proven positive for inventory as the number of homes actively for sale reached its highest level since 2020,” said Danielle Hale, chief economist at Realtor.com, who noted that Supply has increased while supply is still well below pre-pandemic levels, with the South, where homes are cheaper, leading the way.
The number of applications to refinance a home loan rose 8% this week and was 2% lower than the same week a year ago. The increase has less to do with the small decline in interest rates and more to do with the number being so low that any weekly move in one direction or the other is outsized in the percentage change. Today, there are very few borrowers with interest rates high enough to benefit from refinancing.
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