Mortgage application volume increased by 1.1% last week compared to the previous week, signaling a gradual recovery in the housing market despite ongoing higher interest rates. This data, released by industry group the Mortgage Bankers Association (MBA), points to a clear increase in full homebuyer activity.
The MBA’s week-to-week seasonally adjusted index showed that applications to buy a home increased 2% over that week. It’s this kind of big leap that is especially praiseworthy! That’s an 18% increase in purchase applications compared to this time last year. Michael Fratantoni, the chief economist for the MBA, pointed to one particularly exciting trend. The increase in purchase applications is an encouraging sign of improving homebuying activity.
Less common government loans, typically a popular option among lower-income or first-time homebuyers, increased significantly. This week government purchase applications jumped almost 5%. They were up 40% from a year earlier. This trend indicates that buyers are increasingly looking to government-backed options to pivot with the prevailing market conditions.
The refinance share of mortgage activity has gone down, currently making up 36.4% of all applications. Applications to refinance home loans dropped by 0.4% on the week. With this latest increase, refinance applications are now 44% higher than the same week last year. It’s a testament to how many of today’s homeowners are finding a window of opportunity to refinance, despite higher rates.
The average contract interest rate for 30-year fixed-rate mortgages, as reported by Mortgage News Daily, is 6.86%. This is up 22 basis points from the same week one year ago. This increase in interest rates has caused some prospective buyers to move more quickly when it comes to buying their new home.
New listings are now up—way up—5.5%. At the same time, total active listings nationwide are roughly 14% above where we were this time last year. With this expansion of inventory comes a wonderful opportunity for buyers. For those who have long been waiting, an expanded market will soon provide many more choices.
“The news for the week was the growth in purchase applications,” – Michael Fratantoni