Potential homebuyers are taking advantage of lower mortgage rates and a higher supply of homes for sale, leading to an increase in mortgage demand. The Mortgage Bankers Association reported a 2.8% rise in total mortgage application volume compared to the previous week. The average interest rate for 30-year fixed-rate mortgages also decreased, reaching the lowest rate in over a month.
Applications for home purchase mortgages saw a significant increase of 6% for the week, the highest level since January. However, compared to the same week last year, applications were 21% lower, likely due to the timing of the Thanksgiving holiday. On the other hand, applications for refinancing a home loan fell 1% for the week and were 7% lower than a year ago.
Despite the decline in mortgage rates, conventional refinance applications decreased while FHA and VA refinances rebounded. The overall strength in purchase activity is being supported by lower rates and higher inventory levels, giving prospective buyers more options.
Looking ahead, investors are monitoring geopolitical headlines and economic data, including the ADP employment report and ISM services index. Federal Reserve Chairman Jerome Powell is also set to speak at The New York Times DealBook Summit. Overall, the housing market is responding positively to the combination of lower mortgage rates and increased supply of homes for sale.
Photo credit
www.nbcnews.com