Spring hasn't officially arrived yet, but the spring housing market appears to be on the move despite persistently high mortgage rates.
Mortgage applications to purchase a home rose 11% last week from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. Demand is 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) fell to 7.02% from 7.04%, with points holding steady at 0.67 (including origination fee) for loans with a 20% down payment. %.
“It is noteworthy that purchase volume — especially for FHA loans — rose strongly, showing once again how sensitive the first-time homebuyer segment is to relatively small changes in the direction of interest rates,” said Mike Fratantoni, senior vice president and chief economist at Housing Bank. . Master of Business Administration. “Other housing data sources show increases in new listings, which is a real positive for the spring buying season given the lack of for-sale inventory.”
There were 14.8% more homes for sale in February than the same time last year, according to Realtor.com. It is worth noting that homes priced between $200,000 and $350,000 increased by 25% over last year, exceeding all other price categories.
“The first two months of 2024 proved to be positive for inventory levels, as the number of homes for sale was at its highest level since 2020,” said Danielle Hale, chief economist at Realtor.com, noting that despite the supply, the South remains lower. Far from pre-pandemic levels, the South, where homes are less expensive, is leading the charge.
Home loan refinancing applications rose 8% during the week and were 2% lower than the same week one year ago. The rise has nothing to do with the slight decline in interest rates, but is more likely because the number is so low that any weekly movement in either direction would be very large in percentage change. There are very few borrowers today with rates high enough to benefit from refinancing.
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