Consumers returned from the holiday season to find mortgage rates at their lowest since September, and they’re responding in dramatic fashion.
The number of mortgage applications increased by almost 28% last week compared to the previous week, according to the Mortgage Bankers Association.
The average contract interest rate for 30-year fixed-rate mortgages with reasonable credit balances ($726,200 or less) decreased to 6.23% from 6.42%, with score dropped to 0.67 from 0.73 (including origination fee) for loans with 20% down. pay.
Prices fell to a recent high of 7.2% at the end of October on the MBA survey and ended the year at 6.58%. One year ago, the average rate on a 30-year fixed was 3.64%.
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The demand for refinancing made the most changes, up 34% from last week, but it is 81% lower than the same week last year. Mortgage refinancing activity rose to 31.2% of total applications from 30.7% last week.
Applications for a mortgage to buy a house rose 25% week-on-week but were 35% lower than the same week last year.
“As we enter the early spring buying season, lower mortgage rates and more homes on the market will help the ability for first-time home buyers,” said Mike Fratantoni, representative senior and economics major in MBA.
However, the market does not see an increase in the product. The number of active listings is about 21% higher than last year, according to Redfin, a real estate agency. This is because the houses have been sitting on the market for a long time, and there are very few sales. New home listings for sale are down 22% year over year.