Real Estate Making a Comeback? Mortgage Applications Set for a Sharp Increase in 2024
2024-01-12 Recommended by Evelyn Yang
With borrowing costs hovering near a seven-month low, U.S. purchase mortgage applications last week posted their largest increase since June.
The Mortgage Bankers Association’s purchase mortgage application index rose 5.6% during the week ending January 5, which included the New Year’s holiday. The overall mortgage application index, including refinancing, climbed 9.9%, its largest increase in nearly a year.
Mortgage application indexes tend to fluctuate significantly around holidays, which helps explain some of the sharp declines and increases in recent weeks.
The contract rate for 30-year fixed-rate mortgages rose 5 basis points to 6.81%, marking a second consecutive increase. Overall, rates are hovering around last summer’s levels, below the highs reached in the fall, when rates approached 8%.
With the Federal Reserve signaling that it has finished raising borrowing costs, existing-home sales have edged up recently, and new-home purchases have generally improved, despite some bumps. Lawrence Yun, chief economist of the National Association of Realtors, said last month that it would take several more months to see homebuyers respond to lower rates.
The MBA report also showed that refinancing applications surged 18.8%.
The MBA’s survey uses responses from mortgage bankers, commercial banks, and savings banks and has been conducted weekly since 1990. The data cover more than 75% of all retail residential mortgage applications in the United States.
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