New Home Purchase Mortgage Applications Surge 22.2% YoY
Oahu Coastline
Demand for new homes remains robust, as reflected in the Mortgage Bankers Association (MBA) Builder Application Survey – showing 22% year-over-year increase in mortgage applications for new home purchases, marking the 11th consecutive annual rise. As some experts note, the ongoing shortage of existing homes for sale continues to drive prospective buyers toward newly built homes.
December Home Sales Conclude Worst Year Since 1995
Full-year sales for 2023 totaled 4.09 million units, the lowest since 1995. Despite the decline, Lawrence Yun, NAR’s chief economist, believes the latest month’s sales could be the bottom before a rebound in the new year, citing lower mortgage rates and the expectation of increased inventory.
Americans Rush to Refinance Mortgages Amid Falling Rates
Leeward homes on Oahu
The MBA reported an 11% increase in the Refinance Index for the week ending January 12 compared to the previous week, marking a 10% rise from last year. Overall, mortgage applications surged by more than 10% during the week. The drop in rates, now at 6.75%, the lowest in three weeks, has revitalized housing market activity, with potential buyers actively attending open houses and tours.
Although purchase activity is trailing year-ago levels, refinance applications have improved, showing year-over-year gains. The MBA is cautiously optimistic that home purchases will increase in the coming months if rates continue to ease—however, the housing market’s full rebound hinges on elevated home prices, driven by low supply. Existing homeowners, reluctant to give up their secured low rates, contribute to the scarcity. Nearly 89% of American homeowners have mortgages below 6%, discouraging them from selling their homes, and the median monthly payment, when today’s rates are higher.
Next week’s potential market-moving reports are:
- Tuesday, Jan. 30: Job Openings, S&P Case-Shiller home price index (20 cities)
- Wednesday, Jan. 31: ADP Employment, Employment Cost Index, Fed Interest-Rate Decision
- Thursday, Feb. 1: Initial Jobless Claims, U.S. Productivity
- Friday, Feb. 2: U.S. Non Farm Payrolls, Unemployment Rate, Hourly Wages
As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (808) 517-6416.
