NFL

Mortgage demand increases by over 28%

By Ajay Pandit

Jan 18, 2023

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The Mortgage Bankers Association's seasonally adjusted index shows 

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a roughly 28% increase in mortgage application volume from the prior week.

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The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) dropped from 6.42% to 6.23%, 

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with points for loans with a 20% down payment falling from 0.73 to 0.67 (including the origination fee).

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According to the MBA poll, rates recently peaked at roughly 7.2% at the end of October, 

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but they concluded the year at 6.58%. The 30-year fixed rate's typical rate was 3.64% a year ago.

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The biggest change was in refinance demand, which increased 34% from the previous week 

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but was still 81% below the same period a year ago. 

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Refinance applications made up 31.2% of all mortgage activity, up from 30.7% the week before.

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Mortgage applications for house purchases increased 25% week over week 

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while declining 35% from the same week a year earlier.

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Lower mortgage rates and more homes on the market will increase affordability

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For first-time homebuyers as the spring purchasing season gets underway, 

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according to Mike Fratantoni, senior vice president and chief economist at the MBA.

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However, the market is not experiencing an increase in inventories. 

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Real estate agency Redfin estimates that there are 21% more active listings today than there were a year ago. 

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This is primarily a result of houses being on the market for extended periods of time with much fewer transactions. 

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Home for sale new listings are down 22% from the previous year.