
Mortgage interest rates are now decidedly lower than a year ago, and home shoppers are buying in, but most are wealthier consumers purchasing more expensive homes.
Total mortgage application volume rose 2.3 percent last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was essentially flat compared with the same week one year ago.
Falling rates were likely behind a sizable jump in loan applications to purchase a home. They rose 4 percent for the week and were 2 percent higher than a year ago. Buyers last year were up against high home prices and rising rates, pushing affordability down to the lowest level in a decade. That, combined with a severe scarcity of entry-level homes for sale, put the housing market in a deep freeze. Rates, however, began falling at the end of the year, helping affordability, but apparently only for some.
“Purchase applications have now increased year over year for four weeks, which signals healthy demand entering the busy spring buying season,” said Joel Kan, the MBA’s associate vice president of economic and industry forecasting. “However, the pickup in the average loan size continues, with the average balance reaching another record high. With more inventory in their price range compared to first-time buyers, move-up and higher-end buyers continue to have strong success finding a home.”
The average loan size jumped to a record $326,000, well above the nation’s median home value, which the National Association of Realtors said stood at $247,500 in January.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.64 percent last week from 4.67 percent the week before, with points increasing to 0.47 from 0.44 (including the origination fee) for loans with a 20 percent down payment. The rate was at 4.77 percent a year ago.
Applications to refinance a home loan decreased 0.2 percent for the week and were 4.4 percent lower than a year ago. Rates may be lower than last year, but so many people have already refinanced at even lower rates, in the 3 percent range, that there is a limited pool of potential borrowers who could still benefit.
Written by Admin
Product categories
Finance news
![]() Baidu’s robotaxis don’t need any human staff in these parts of ChinaChinese tech company Baidu announced Monday it can sell some robotaxi rides without any human ... Read More Fed Governor Bowman sees ‘similarly sized’ rate hikes ahead after three-quarter point movesFederal Reserve Governor Michelle Bowman said Saturday she supports the central bank's recent big rate ... Read More Danger ahead: The U.S. economy has yet to face its biggest recession challengeYou'd be hard-pressed now to find a recession in the rearview mirror. What's down the ... Read More |