Increased Mortgage Demand second week in a rowdespite some volatility in mortgage rates.
Total applications rose 6.5% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate on 30-year fixed-rate mortgages with qualifying loan balances ($726,200 or less) fell from 6.79 percent to 6.71 percent, with a 20 percent drop in loan points from 0.80 (including the origination fee) to 0.79 payments.
That’s Average, but Mortgage Rates Are Soaring Most of the Week before the sharp drop Friday’s news about the collapse of a Silicon Valley bank.
Mortgage applications to buy a home rose 7% this week despite higher interest rates, but are still 38% below a year ago. Home-buying activity, which largely stalled in early February after rates rose by about a percentage point, appears to be coming back, perhaps because buyers fear further increases in rates. The question is how long will this last?
“It always happens when interest rates spike, and it only lasts for a few weeks,” said John Burns of John Burns Real Estate Consulting. He said he saw new home sales in February despite higher rates volume has increased.
Lennar, the second-largest U.S. homebuilder, reported better-than-expected earnings on Tuesday, with chairman Stuart Miller saying in a press release:
“Homebuyers are considering the possibility that today’s interest rate environment could become the new normal. As a result, housing markets continue to shift as growth in households and family formation continues to drive demand against chronic supply shortages.”
Home loan refinance applications were up 5% from the previous week, but down 74% from a year ago.
Mortgage rates fell further on Monday, but rebounded again on Tuesday, according to a separate Mortgage News Daily survey February Consumer Price Index was released, suggesting that the Fed may hike Despite the recent turmoil in the banking sector, it’s coming up again next week.