Spring is usually when the housing market heats up. But after months of frenzied buying comes a sign that it might finally be slowing down.
An index tracking applications for mortgages to purchase homes decreased 5 percent, seasonally adjusted, from the previous week, according to the Mortgage Bankers Association. That follows two weeks of slight decreases.
The index is still 51 percent higher than it was a year ago, in the early days of the pandemic.
“The rapidly recovering economy and improving job market is generating sizeable home buying demand, but activity in recent weeks is constrained by quicker home-price growth and extremely low inventory,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.
Buyers have been rushing to purchase, leaving hesitant shoppers in the dust. Redfin data shows that sellers of 59 percent of homes in contract last month had accepted offers within two weeks of listing — an all-time high. And bidding wars pushed the average sale price just above asking.
With interest rates having risen recently, MBA’s refinance index also decreased 5 percent from the previous week and was 20 percent lower than the same week one year ago. Refinances made up 60.3 percent of applications and the average refinancing loan was $272,100, down from last week’s $275,000.
“Overall, refinance demand has decreased, with volume over the past 10 weeks down by more
than 30 percent,” Kan said.
The average purchase loan decreased to $399,500 from last week’s $401,400.
The average contract interest rate for 30-year fixed-rate mortgages increased to 3.36 percent from 3.33 percent, while jumbo loans increased to 3.41 percent from 3.34 percent.
MBA’s survey covers 75 percent of the residential mortgage market and has been conducted weekly since 1990.