Housing Respite? Mortgage Apps Rise

A one week rise in mortgage apps elicits cartwheels by lenders:

Forbes headline: Mortgage Applications Rise In Potential Housing Market Respite—Could Home Buying Become More Affordable Soon?


:pushpin: Mortgage applications climbed 1.2% from one week earlier, according to the latest data from the Mortgage Bankers Association, marking the first weekly increase since June 24, as the 30-year fixed mortgage rate posted its largest weekly decline since 2020, falling 31 basis points to 5.43%.

:pushpin: In a statement, MBA’s Joel Kan said the decline in rates led to increases in both refinancing and purchase applications and attributed the sudden decrease to expectations calling for a weaker market environment in the coming months after the Federal Reserve continued its aggressive economic tightening campaign on Wednesday.

:pushpin: The respite comes after mortgage applications abruptly plunged to the lowest level in more than 22 years after the Fed started raising interest rates, pushing up mortgage rates to the highest level since the Great Recession and thereby driving up monthly payments hundreds of dollars.

:pushpin: Compared to a year ago, activity remains depressed, Kan said on Wednesday, but he posits that “lower mortgage rates, combined with signs of more inventory coming to market, could lead to a rebound in purchase activity.”

:pushpin: Others are also optimistic on what that could mean for the housing market: In a weekend note, Bank of America analysts said mortgage rates could drop from 5.3% to 4.5% by the end of the year, setting the stage for improved affordability and allowing the spike in housing prices to cool to a “healthy” 5% next year from today’s staggering 15%.