Mortgage demand slows, but is still far ahead of a year ago

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“Homebuyer demand is incredibly strong compared with last year, but there appears to be a slight pullback this month.

A drop in buyer demand caused total mortgage application volume to fall 0.6% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

Applications to purchase a home fell 2% for the week, the fourth straight week of declines. Purchase demand is down nearly 7% compared with four weeks ago. Volume, however, is still 26% higher than one year ago.

The drop may be seasonal, although not much has conformed to normal patterns in the year of Covid-19. It may be more a factor of the incredibly low supply of homes for sale. Inventory continues to set record lows, especially at the entry level of the market.

Strong demand is outstripping any new supply coming onto the market, thanks to consistently low mortgage rates, which set a new record two weeks ago.

Rates did move slightly higher last week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.02% from 3%, with points increasing to 0.36 from 0.32 (including the origination fee) for loans with a 20% down payment. That rate was a full percentage point higher a year ago.((CNBC.)

Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®

Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205

www.OliverReports.com
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“If you’re interested in Marblehead, you have to visit the blog of Mr. Andrew Oliver, author and curator of OliverReports.com. He’s assembled the most comprehensive analysis of Essex County we know of with market data and trends going back decades. It’s a great starting point for those looking in the towns of Marblehead, Salem, Beverly, Lynn and Swampscott.”