Homebuyers jump on lower mortgage rates
Mortgage rates dropped for the first time in 12 weeks
Rent prices expected to rise even more this year, pricing people out of cities
Rent and home prices have seen major increases over the past year and in some places, they've hit record highs.
Lower mortgage rates brought homebuyers back into the market.
The interest rate for 30-year fixed-rate mortgages decreased to 4.09% from 4.15% compared to the prior week.
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That helped lift demand for mortgage applications by 8.5%, according to the weekly survey from the Mortgage Banker's Association.
A real estate sign posed in front of a home states that it is under contract.(AP Photo/Lisa Poole)
"Mortgage rates dropped for the first time in 12 weeks, as the war in Ukraine spurred an investor flight to quality, which pushed U.S. Treasury yields lower," said Joel Kan, MBA’s associate vice president of economic and industry forecasting. "A 6-basis-point decline in the 30-year fixed-rate mortgage led to a slight rebound in total refinance activity, with a larger gain in government refinances."
The Refinance Index increased 9% from the previous week.
RENTAL AND HOME PRICES EXPECTED TO RISE EVEN MORE THIS YEAR, FORCING SOME TO PACK UP AND MOVE
"Purchase activity also increased, as prospective buyers acted on lower rates and the early start of the spring buying season, added Kan. "The average loan size remained close to record highs, with higher-balance loan applications continuing to dominate growth."
The Purchase Index also saw a boost of 9% from one week earlier.
"Looking ahead, the potential for higher inflation amidst disruptions in oil and other commodity flows will likely lead to a period of volatility in rates as these effects work against each other," said Kan.
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The survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990.