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Mortgage applications were at their highest level since early August 2022.
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Mortgage applications continued to rise after rates fell last week, a sign that some buyers are back in the housing market. But nowhere near the same numbers as last year.
The Association of Homeowners Association’s applications for mortgage refinancing in the week ending January 20, were 15% higher than the previous week, while its sales index rose to 3 %. The seasonal sales trend was at its highest level since early August 2022, while the number of refinancing applications was the highest since September.
Period and low mortgage rates are among the forces driving the recent increase, said Joel Kan, chief economist for the Mortgage Bankers Association. As the housing market leaves the holiday doldrums, changes in mortgage rates, which have fallen from late 2022 highs, have provided much of a breather. for buyers to enter the market.
At 6.2%, the average mortgage rate last week was the lowest since September 2022, Kan said. “The truth is that the price has dropped to get some good news first spring shopping mall it’s starting to come in,” he said. “If that’s the case, we might see a lot of activity coming back.”
The same cannot be done for refinancing needs, which are more price sensitive than the need for a home purchase. “Perhaps the price will have to drop significantly for refrigerators to be viable for many homeowners,” said Kan.
The recent increase does not mean that demand is high. The refinancing index is 77% lower than the same week last year, while the sales rate is 39% lower.
According to Kan, the trade group is seeing a recovery in the housing market That’s a four-quarter low—but that doesn’t mean it’s a busy year for homebuyers. The latest report by the trade group expects about 4.4 million existing-home sales this year, which would be the lowest annual number in about a decade.
“Any kind of recovery that’s in the first half of ’23, or the whole year, is not a disaster by any means,” Kan said. “They just got us out of the hole we were in in the fourth quarter.”
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