Mortgage News May 8, 2023
The recent increase in US home purchase mortgage applications, despite rising mortgage rates, indicates that the housing demand in the country is stabilizing. According to the data released by the Mortgage Bankers Association, there was a 4.6% increase in the gauge of home purchases in the week ending April 21, which is the second time in three weeks. This shows that the housing market may have reached its bottom, and it is showing signs of recovery.
Although the contract rate on a 30-year fixed mortgage rose by 12 basis points to 6.55%, the increase in demand for home purchases shows that buyers are willing to pay higher rates to purchase a home. However, if the mortgage rates continue to rise, it may become difficult for the real estate recovery to gain momentum, as the affordability of homes will be affected.
The overall mortgage applications gauge experienced a 3.7% gain, driven by an upsurge in the refinancing index, as indicated in the report. This shows that homeowners are taking advantage of the low-interest rates and refinancing their homes to lower their monthly payments.
Responses from mortgage bankers, commercial banks, and thrifts are utilized in the MBA survey, which has been carried out on a weekly basis since 1990. With coverage of over 75% of all retail residential mortgage applications in the US, the data serves as a dependable barometer for assessing the health of the housing market.
In conclusion, the recent increase in home purchase mortgage applications, along with an increase in refinancing, indicates that the US housing market may be stabilizing. However, the rise in mortgage rates may pose a challenge to the real estate recovery’s momentum, and it is something that needs to be closely monitored.
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