Demand for mortgages rose for the second week in a row, despite some fluctuations in mortgage rates.
Total application volume increased 6.5% last week compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with matching loan balances ($726,200 or less) fell to 6.71% from 6.79%, with the score falling to 0.79 from 0.80 (including origination fees) for loans of 20%. premium drop.
That was the average, but mortgage rates were considerably higher most days of the week before falling sharply on Friday on news of the Silicon Valley bank failure.
Despite rising rates, mortgage applications for a home were up 7% for the week but were still 38% lower than the same week a year ago. Home-buying essentially stopped in early February, after prices rose about a full percentage point, but now appears to be back, perhaps because buyers are wary of rising prices. The question is how long will that last?
“It always happens when prices go up and it only lasts a few weeks,” said John Burns of John Burns Real Estate Consultants, who said he saw sales of newly built homes increase in February despite high rates.
Lennar, the nation’s second-largest homebuilder, reported better-than-expected earnings on Tuesday, with the company’s president, Stuart Miller, saying in the release: “Homebuyers are considering the possibility that today’s interest rate environment can be the new normal. Accordingly, The housing market continues to shift as increasing household and household composition continues to drive demand against chronic supply shortfalls.”
Home loan refinance applications increased 5% over the previous week but were 74% lower than a year ago.
Mortgage rates fell more on Monday, according to a separate survey from Mortgage News Daily, but rebounded again on Tuesday after Consumer price index for the month of February indicating that the Federal Reserve may raise interest rates again next week despite the recent turmoil in the banking industry.
“Devoted student. Bacon advocate. Beer scholar. Troublemaker. Falls down a lot. Typical coffee enthusiast.”