Mortgage applications stall at start of the spring housing market
Stats show an increase of just 0.3% on a seasonably adjusted basis.
The start of the spring housing market has yet to energize the mortgage market, the latest numbers from the Mortgage Bankers Association show.
Mortgage applications increased just 0.3% from one week earlier, according to the MBA’s Weekly Mortgage Applications Survey for the week ending March 2.
They did not increase as much as expected, given that President’s Day weekend was the unofficial start of the usually busy spring market.
Volume fell 1% for the week and was just 1% higher than the same week one year ago.
Among the factors being cited for the slow start are a lack of housing inventory and high borrowing costs.
Property data firm CoreLogic said homebuyers today are less worried about mortgage rates than they are about the supply crisis, especially for entry-level, less expensive homes.
Low inventory across the nation continues to push home prices higher at a fast clip, and property values were 6.6% higher in January from a year ago.
Meanwhile, MBA noted that the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) hit its highest level since January 2014 of 4.65%, from 4.64%.
Points decreased to 0.58 from 0.63, including the origination fee, for 80% loan-to-value ratio loans.
The average contract interest rate for 30-year fixed-rate mortgages with loan balances greater than $453,100 decreased to 4.56% from 4.57%.
Points increased to 0.52 from 0.51 – including the origination fee – for 80% LTV loans. The effective rate decreased from last week.
The survey covers more than 75% of all US retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.
The news of a multi-year high in 30-year mortgage interest rates comes on the heels of earlier reports that higher interest rates are becoming the new norm, and many homebuyers rushed to get into mortgages late last year at historically favorable rates.
See how much interest rates have moved and compare the leading providers in our guide to home loans.