Potential buyers leave an open house in Redondo Beach, California.
Patrick T. Fallon | Bloomberg | Getty Images
Fall is usually the start of the slower season for the housing market, but nothing is usual in the current housing market due to a pandemic. Potential buyers see a slight increase in inventory and as a result rush back into the fray.
Mortgage applications for the purchase of a home jumped 7% last week from the previous week, seasonally adjusted, according to the Mortgage Bankers Association. An additional adjustment has been made to account for the Labor Day holiday. This is the highest level since April of this year. These requests were still 11% lower than the same week a year ago, but it was the smallest annual decline in 14 weeks.
Home buyers have been crippled by the meager supply of homes for sale, but that supply has been increasing lately, albeit slowly. The number of new registrations increased for nine straight weeks over the summer, but finally fell again last week, according to a report from Realtor.com.
“Even with the recent slide in new listings, the gap to pre-COVID levels has narrowed significantly as more new sellers have entered the market so far in 2021 than last year,” according to the report.
Home prices continue to advance at a record pace, which has also been reflected in the demand for purchase mortgages.
“Conventional and government requisitions have increased, and the average loan amount per requisition has increased to $ 396,800. The highly competitive buying market continues to put upward pressure on selling prices, ”said Joel Kan, MBA economist.
Home loan refinancing requests fell 3% on the week and were also 3% lower than the same week a year ago. Borrowers haven’t had much of an incentive to refinance as mortgage rates have barely moved in the past month and rates are now higher than they were at the start of the year.
The average contractual interest rate for 30-year fixed rate mortgages with compliant loan balances ($ 548,250 or less) remained unchanged at 3.03%, with points declining to 0.32 from 0. 33 (including set-up costs) for loans with a down payment of 20%.
The refinancing share of mortgage activity fell to 64.9% of total applications, from 66.8% the previous week.