Mortgage Refinance Demand Grew By 6% With The Reduction In Rates

Mortgage Refinance

Pointers at Glance

  • The mortgage applications to refinance a home increased by 6% last week compared to the previous week as interest rates have reduced since September.
  • Applications to buy a home were reduced by 0.1% for the week, during a traditionally slow season for the housing market.

According to the seasonally adjusted index of the Mortgage Bankers Association, the interest rates of a mortgage reduced again. Due to that, there is a high demand from homebuyers.

Increase In Mortgage Refinance Applications

The applications for a mortgage refinance increased by 6% compared to the previous week. However, it was noticed that the volume of applications to purchase a home still needs to be higher by 36% compared to the same week of the last year. And they are still more than twice what they were in the last month compared to the previous year.

This demand may persist in 2023 too. The recent data on the housing market unveil that home builders are reducing the pace of new construction in response to reduced traffic levels. There are higher chances that more buyers may return to the market in the upcoming months if mortgage rates continue to decrease. Affordability boosts with both lower rates and slower growth in home prices.

Survey By Mortgage News Daily

Mortgage News Daily conducted a separate survey. It showed the average rate on the 30-year fixed jumping 11 basis points. The chief operating officer at the Mortgage News Daily said there might not be an ongoing impact of the US rates in the short term. But, the impact was huge compared to what it would have been due to the time of the year.

Currently, the mortgage rates are close to 25 basis points higher compared to the rates that were on last week Thursday.

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