The spring housing market is showing little signs of life, with both mortgage rates and home prices continuing to rise. Despite an increase in available listings, demand from homebuyers remains weak. Mortgage applications fell last week, and refinancing activity is still low.
Homebuyers are seeing little incentive to jump into the spring housing market , even with an uptick in available listings. Mortgage rates have remained largely stagnant in recent weeks, while home prices continue their upward trajectory. This sluggishness in demand is reflected in mortgage applications, which dropped 4% last week compared to the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. Demand remained flat compared to the same week last year.
\'The average loan size for a purchase loan has increased since the start of the year and continued that trend last week with weaker government purchase activity, which reached $447,300, the highest level since October 2024,' said Joel Kan, vice president and deputy chief economist at the MBA. Despite this, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) dipped slightly to 6.97% from 7.02%. Points, however, increased to 0.64 from 0.63 (including the origination fee) for loans with a 20% down payment. Even with this slight decrease, it's still 17 basis points lower than the same week last year. \'Mortgage rates moved lower last week, consistent with lower Treasury yields following the FOMC meeting and a volatile week for the stock market. The 30-year fixed rate declined to its lowest level in six weeks,' added Kan. This slight decline in mortgage rates did spur some activity in the refinancing market, with applications rising 12% from the previous week and 17% from the same week last year. While these percentage increases appear substantial, they are largely attributed to historically low refinancing volumes. Most borrowers currently hold rates significantly lower than those offered today. Mortgage applications for home purchases are now 39% lower than they were in February 2019, pre-pandemic. Home sales are approaching a 30-year low, and house prices nationwide continue to reach record highs. More sellers are resorting to price reductions, with 15.6% in January compared to 14.7% in January of last year, according to Realtor.com. However, most sellers are still able to maintain their list prices due to sufficient competition. Meanwhile, the supply of homes for sale saw a 25% increase compared to a year ago, largely driven by longer time-on-market durations. The average time to sell a home in January was 54 days, the longest since March 2020, according to Redfin. Despite this increase, the supply of homes for sale remains 25% below January 2019 levels
Mortgage Rates Housing Market Homebuyers Refinancing Home Prices Interest Rates
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