![](https://realestateinvestingnewsonline.com/wp-content/uploads/2024/04/Untitled-750x420.jpg)
The spring housing market is slowing unexpectedly, as only a few people are applying for mortgages. The Mortgage Bankers Association (MBA) says the number of applications stayed about the same last week, dropping just a little by 0.7% from the week before.
One reason for this slowdown is the change in interest rates. The average interest rate for 30-year fixed-rate mortgages for loans of $766,550 or less decreased slightly from 6.97% to 6.93%.
______________________________________________________________________
- Even though interest rates went down a bit, there was only a small drop in mortgage applications.
- Applications to refinance home loans decreased because people who recently got loans are finding little reason to do so, especially since rates are still higher than last year’s.
- Potential homebuyers are waiting for mortgage rates to drop further and for more homes to be listed before they decide to buy.
______________________________________________________________________
Flatlining Mortgage Demand Despite Moderate Interest Rates
While it may appear good at first, this decrease didn’t encourage a lot of action in the housing market. The points for these loans dropped from 0.64 to 0.60, which includes the origination fee, for loans with a 20% down payment.
Applications to refinance home loans declined by 2% for the week and were down 9% compared to the same week last year. This application drop happened because mortgage rates today are still around half a percent higher than last year.
So, people who recently got loans need more reasons to refinance. On the other hand, those with older loans might already have much lower rates.
Applications for buying homes also went down slightly by 0.2% from the week before, and they’re significantly lower by 16% compared to last year. Joel Kan, an economist at the MBA, says that potential homebuyers are waiting to see if mortgage rates drop further and if more homes become available for sale.
Kan also mentions that even though lower rates encourage more homes to be put up for sale, this change might happen slowly over time. The MBA predicts that rates could reach around 6% by the end of the year, which might change how the housing market works.
Even though mortgage rates have been staying fairly steady, experts think there could be significant changes next week. According to Matthew Graham, employed at Mortgage News Daily, interest rates primarily hinge upon bond markets, which are currently anticipating crucial economic data to gauge inflation and overall financial conditions.
Graham suggests that if inflation goes down further or if the economy starts to show signs of weakness, it might lead to lower mortgage rates.
As the housing market gets ready for its busy spring season, everyone is watching closely for any changes. Potential buyers and homeowners should be patient and pay attention to updates in the market.
Subscribe to our newsletter today for exclusive insights and expert analysis on the housing market.
Leave a Reply