Homebuyers get ready to “spring” into action

Despite higher costs, applications for purchase loans increased 7% last week

National /
Mar.March 10, 2021 08:00 AM
(iStock / Photo Illustration by The Real Deal)
(iStock / Photo illustration by The Real Deal)

Homebuying season is nearly here and the demand for mortgages is accelerating.

An index tracking the applications to purchase homes increased 7 percent, seasonally adjusted, last week compared to the prior week, according to the Mortgage Bankers Association.

MBA’s weekly metric, known as the purchase index, presages the seasonal uptick the housing market sees every spring, according to Joel Kan, head of industry forecasting for the association.

“With the spring buying season at the doorstep, the purchase market had its strongest
showing in four weeks,” he said in a statement.

The MBA index tracking refinance applications went the other way, dropping 5 percent from the prior week, which Kan attributed to rising mortgage rates.

The average rate for a 30-year, fixed-rate mortgage was 3.26 percent last week, the highest since July 2020 and up 40 basis points since the beginning of the year. Last week’s rate was up only 3 basis points from the week prior, however. Jumbo rates also increased marginally, to 3.34 percent from 3.33 percent.

“Signs of faster economic growth, an improving job market and increased vaccine distribution are pushing rates higher,” said Kan, explaining that the run-up in mortgage rates is cooling the demand for refinance applications. “[Refinance] activity declined last week for the fourth time in five weeks.”

For the second week in a row, the average loan size on purchase applications dropped. Last week the average request for a loan to buy a home was $409,900, down from $412,300 the previous week. It comes after weeks’ of gains.

MBA’s indices survey 7 percent of the residential mortgage market on a weekly basis. Its report has been running since 1990.






    Related Articles

    arrow_forward_ios
    Renderings of One Beverly Hills and Beny Alagem. (One Beverly Hills, Getty)
    Beny Alagem’s $2B Beverly Hills project gets go-ahead
    Beny Alagem’s $2B Beverly Hills project gets go-ahead
    Michael Nourmand (Facebook via Nourmand & Associates)
    Compass tries to recruit brokerage owner Michael Nourmand
    Compass tries to recruit brokerage owner Michael Nourmand
    Joel Singer (California Association of Realtos)
    California Association of Realtors CEO to retire
    California Association of Realtors CEO to retire
    PocketList shuttered after having formally launched in L.A. last July. (Getty, PocketList)
    Spencer Rascoff-backed rental listing platform shuts down
    Spencer Rascoff-backed rental listing platform shuts down
    Blackstone CEO Stephen Schwarzman (Getty, iStock)
    Blackstone buys San Diego apartment complexes in $1B deal
    Blackstone buys San Diego apartment complexes in $1B deal
    10745 W. Burbank Boulevard in North Hollywood (Google Maps)
    Developer eyes apartment complex in North Hollywood
    Developer eyes apartment complex in North Hollywood
    Rendering's of Byron Allen's future mansion. (Getty, Landry Design Group)
    Media mogul Byron Allen is building a Beverly Hills megamansion
    Media mogul Byron Allen is building a Beverly Hills megamansion
    (iStock)
    SoCal home prices keep rising while supply dwindles
    SoCal home prices keep rising while supply dwindles
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...