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Housing Market Sees Uplift as Mortgage Applications Rise by 9.7%

Updated: Mar 21

Home purchase index vs 30 year fixed

The real estate and mortgage landscapes are always in flux, reflecting the broader economic conditions and consumer sentiment. In an interesting turn of events, the Mortgage Bankers Association (MBA) reported a significant uptick in mortgage activity last week. This shift could be attributed to a slight improvement in mortgage rates or the early onset of the spring market, a period traditionally associated with increased real estate transactions. According to the MBA's Market Composite Index, a measure of application volume, there was a 9.7 percent increase on a seasonally adjusted basis from the previous week, and an even more substantial 12.0 percent increase on an unadjusted basis.

Delving deeper into the numbers, the Refinance Index saw an 8.0 percent rise during the week ending March 1, albeit still trailing behind the same week in 2023 by 2.0 percent. Meanwhile, the refinance share of mortgage activity slightly dipped to 30.2 percent from 31.2 percent the week before. On the brighter side, the index measuring purchase applications surged by 11.0 percent on a seasonally adjusted basis and 13.0 percent before adjustment, though it was still 8.0 percent lower than the same week a year ago. This indicates a burgeoning interest in purchasing homes, potentially signaling a revitalizing market.

Mike Fratantoni, MBA's Senior Vice President and Chief Economist, attributed this resurgence in mortgage applications to the stabilization of inflation rates, which, although not markedly better, were not significantly worse than anticipated. This stability played a role in the slight decrease in mortgage rates, with the 30-year fixed mortgage rate edging down to 7.02 percent last week. Fratantoni highlighted the marked increase in purchase volume, particularly for FHA loans, emphasizing the sensitivity of first-time homebuyers to even minor shifts in mortgage rates. This sensitivity is crucial for the spring buying season, which is also seeing an increase in new listings, alleviating some of the pressure from the limited inventory available for sale.

Other noteworthy trends from the MBA's Weekly Mortgage Applications Survey include a reversal in the two-week decline of loan sizes, with the average rising to $385,100 for all loans and purchase loans growing to $442,500. While FHA-guaranteed loans saw a slight decrease in their share of total applications, the average interest rates for various mortgage types showed minor fluctuations, underscoring the dynamic nature of the market.

For individuals navigating the complexities of the real estate and mortgage markets, these trends underscore the importance of staying informed and agile. Whether you're a first-time homebuyer sensitive to rate changes, a homeowner considering refinancing, or someone keen on understanding the broader market dynamics, these insights are invaluable. If you have any real estate or mortgage needs or questions, I encourage you to engage with us. Together, we can navigate the opportunities and challenges of the current market, ensuring you make informed decisions tailored to your unique circumstances.

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