The roller coaster ride that is the U.S. housing market continues as we enter the second quarter of 2017, with the latest figures showing a drop in mortgage applications to refinance, while applications to purchase a new home edge up slightly, according to a report on CNBC.
According to data from the Mortgage Bankers Association, mortgage applications to refinance fell 4 percent for the week and are 33 percent lower than a year ago. Meanwhile, applications to purchase a home edged upward 1 percent for the week. They currently are 8 percent higher than the same period last year. Frank Martell, president and CEO of CoreLogic, noted that purchase activity is also being hampered by high prices and tight supply. He said gains in home prices in February were up 7 percent annually.
“Home prices continue to grow at a torrid pace so far in 2017, and these gains are likely to continue well into the future. Home prices are at peak levels in many major markets.”
As it turns out, higher prices are having some interesting effects on the current market. They are forcing buyers to make some tradeoffs on the kinds of homes they can afford. They also may be shut out of ownership altogether. As a result, buyers are willing to open their wallets when they make the decision. The Mortgage Bankers Association’s weekly purchase loan data showed that the average size of a home loan was the largest in the history of its survey, which goes back to 1990. Lynn Fisher, the MBA’s vice president of research and economics, noted that there has been little news from Washington.
“Markets appeared to hit pause last week, with little new information emerging about upcoming administrative or legislative policy changes.”
The trend for mortgage rates has been steady in recent weeks, but the Federal Reserve could make moves that would impact the rates over the remainder of 2017. According to Freddie Mac, the 30-year fixed mortgage averaged 4.10 percent for the week ending April 6, down from 4.14 percent the previous week, according to Sean Becketti, chief economist at Freddie Mac.
“After three straight weeks of declines, the 30-year mortgage rate is now barely above the 2017 low. Next week’s survey rate may be determined by Friday’s employment report and whether or not it can sustain the strength from earlier this year.”