Demand for mortgages increased for the second straight week, despite some volatility in mortgage rates.
Total application volume rose 6.5% last week compared with the previous week, based on the Mortgage Bankers Association’s seasonally adjusted index.
The common contract rate of interest for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to six.71% from 6.79%, with points falling to 0.79 from 0.80 (including the origination fee) for loans with a 20% down payment.
That was the typical, but mortgage rates were largely higher for a lot of the week before dropping sharply Friday on news of the Silicon Valley Bank failure.
Despite rates being higher, mortgage applications to buy a house rose 7% for the week but were still 38% lower than the identical week a yr ago. Homebuying mainly stalled in early February, after rates rose a couple of full percentage point, but they appear to be coming back now, perhaps because buyers are concerned rates will go even higher. The query is how long will that last?
“That all the time happens when rates surge and it only lasts just a few weeks,” said John Burns of John Burns Real Estate Consulting, who said he saw a rise in sales of newly built homes in February despite higher rates.
Lennar, the nation’s second-largest homebuilder, posted better-than-expected earnings Tuesday, with the corporate’s chairman, Stuart Miller, saying in the discharge: “Homebuyers are considering the likelihood that today’s rate of interest environment often is the latest normal. Accordingly, the housing market continues shifting as growing household and family formation continued to drive demand against a chronic supply shortage.”
Applications to refinance a house loan increased 5% from the prior week but were 74% lower than one yr ago.
Mortgage rates dropped further Monday, based on a separate survey from Mortgage News Each day, but bounced higher again Tuesday after the February consumer price index was released, suggesting that the Federal Reserve may raise rates of interest again next week despite recent banking industry turmoil.
