The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 6.75% from 6.73% last week, but that increase didn’t dissuade new borrowers. Instead, applications for a mortgage to purchase a home rose 3%, the third straight week of small but steady gains, according to CNBC.
Purchase applications are still down 21% year-over-year, but as demand for new-home construction rises amid a shortage of existing homes for sale, mortgage demand is following closely behind.
“New home sales have been driving purchase activity in recent months as buyers look for options beyond the existing-home market,” said Joel Kan, MBA’s vice president and deputy chief economist, in a release. “Existing-home sales continued to be held back by a lack of for-sale inventory as many potential sellers are holding on to their lower-rate mortgages.”
Advertisement
Related Stories
Affordability
Cost of Housing Index Shows Most Americans Are Burdened by Home Prices
For both new and existing homes, the average household would need to use more than 30% of its earnings to cover mortgage payments
Financing
Why Down Payments Are Now Nearly 14% Higher Than in 2020
The average down payment in Q1 2024 is high, but it’s still lower than the peak seen in Q4 2023
Economics
Mortgage Rate Declines Could Boost Home Sales Following Months of Low Activity
Encouraging economic news bumped mortgage applications up by 2.6% for the week ending May 3