Products You May Like
Homebuyers are seeing very little reason to get a jump on the all-important spring housing market, even with more listings coming up for sale. Mortgage rates haven’t moved much in the last few weeks, and home prices continue to rise.
Mortgage applications to purchase a home last week dropped 4%, compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Demand was flat compared with the same week a year ago.
“The average loan size for a purchase loan has increased since the start of the year and continued that trend last week with weaker government purchase activity, which reached $447,300, the highest level since October 2024,” said Joel Kan, vice president and deputy chief economist at the MBA.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.97% from 7.02%, with points increasing to 0.64 from 0.63 (including the origination fee) for loans with a 20% down payment. That rate was 17 basis points lower than the same week a year ago.
“Mortgage rates moved lower last week, consistent with lower Treasury yields following the FOMC meeting and a volatile week for stock market. The 30-year fixed rate declined to its lowest level in six weeks,” Kan added.
Applications to refinance a home loan responded to that small drop, rising 12% from the previous week and 17% from the same week a year ago. The percentage increases are large, but much of that is due to volumes being so low. Most borrowers today have rates well below what is being offered today.
Mortgage applications to buy a home are now 39% lower than they were in February 2019, pre-pandemic. Home sales are running at a near-30-year low, and house prices nationally continue to hit record highs.
More sellers are offering price cuts, 15.6% in January compared with 14.7% in January of last year, according to Realtor.com. But most sellers are still seeing enough competition to hold fast to their list prices.
Meanwhile, the supply of homes for sale rose 25%, compared with a year ago. Much of the supply gain is because homes are sitting on the market longer. The average time to sell a home in January was 54 days, the longest since March 2020, according to Redfin. The supply of homes for sale is still 25% below where it was in January 2019.