Strong mortgage demand foreshadows a jump in home sales in September

Strong mortgage demand foreshadows a jump in home sales in September

A sales center sign in front of a new residential community on April 26, 2021 in Litonia, Georgia.

Élie News | Bloomberg | Getty Images

After the Labor Day lull, mortgage demand from homeowners and homebuyers rose sharply last week.

According to the Mortgage Bankers Association’s seasonally adjusted index, total mortgage application volume increased about 5% for the week.

However, mortgage interest rates have not risen, nor have they risen in the past four weeks. The average contractual interest rate for 30-year fixed rate mortgages with compliant loan balances ($ 548,250 or less) remained unchanged at 3.03%, as well as 0.30 points below 0.32 (including capital charges) for loans with a down payment of 20% become.

Home purchase loan applications increased 2% on the week but are still down 13% from a year ago. However, this annual comparison is decreasing. Homebuyers actually pulled back during the summer, as prices rose and supply was insufficient for the toxic mixture. Last week, demand to buy was the highest since April.

Joel Kahn, MBA economist, said, “Despite rising house prices and low inventory levels, there has been a sharp drop in demand for housing. The inventory condition is improving, with more new homes under construction and more homeowners for sale. Advertise your home.

Home loan refinancing applications increased 7% on the week, but are down 5% from a year ago.

“This week’s refinancing gains were driven strongly by an increase in FHA and VA applications,” Kahn said.

These are low down payment loans offered by the federal government and preferred by low income people or first time buyers.

According to another report from the MBA, there was an unexpected increase in mortgage applications to buy a newly built home in August. They generally fall due to the weather in August, but demand is returning despite still strong price increases.

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