On Wednesday, April 7, 2021, a “For Sale” sign appears outside a Palm Beach, Florida home.
Marco Bello | Bloomberg | Getty Images
A sharp drop in mortgage interest rates sent homeowners and potential home buyers to their mortgage lenders.
The total volume of mortgage applications increased 8.6% last week compared to the previous week, according to the seasonally adjusted Mortgage Bankers Association index. This is the first overall increase in weekly applications since the end of February.
The average contract interest rate for 30-year fixed-rate mortgages with compliant loan balances ($ 548,250 or less) decreased to 3.20% from 3.27%, with points rising to 0.36 from 0.33 (including the start-up fee) for loans with a 20% income. That rate was 25 basis points higher a year ago.
The owners reacted quickly to possible savings. Applications to refinance a home loan rose 10% during the week, but were still 23% lower than a year ago. The mortgage refinancing rate increased to 60% of total applications, from 59.2% the previous week.
“Mortgage rates fell to their lowest levels in about two months, prompting a small resurgence of refinancing activity after six weeks of falls,” said Joel Kan, associate vice president of economic and industrial forecasts for MBA. “Borrowers acted on lowering rates for most types of loans, with conventional and government refinancing applications showing gains.”
Mortgage applications to buy a home rose 6% a week and were 57% higher than a year ago. This annual comparison, however, is skewed and will be for several more weeks due to the fact that the real estate market essentially stopped a year ago during the first two months of the pandemic. Then, he returned drastically early last summer.
“MBA expects the purchasing market to remain strong as the job market recovery and supportive demographics will fuel housing demand in the coming months,” Kan said. “The average loan size for purchase applications increased after a few weeks of decline as there are fewer homes available for sale for a competitive buying market that is accelerating price growth. housing “.
Higher house prices and record supply of homes for sale have slowed the housing market, even in the historically busy spring season. The hope is that as more Americans get vaccinated, potential sellers will feel better about listing their homes on the market. So far, this month there have been fewer new listings than usual.