![]() ![]() A healthy housing market needs to have sellers and brokers that are in touch with reality, and the reality is set by potential buyers who’re waiting for prices to come down further. So the housing market is not thawing out at 6.5% mortgage rates. Mortgage rates really haven’t budged off the 6.5% range since coming down from the 7% range in November last year, with the average contract interest rate for conforming 30-year fixed-rate mortgages at 6.50% in the latest week, according to the Mortgage Bankers Association today: During the last week of February, it hit a 28-year low. The MBA’s purchase mortgage index has now been hovering for weeks at the lows last seen during the bottom of Housing Bust 1. ![]() Compared with the same week in prior years, purchase mortgage applications were down: But not this year, and we’ve already seen that with pending home sales that plunged 23% year-over-year in April, and we’ve seen it with closed sales in March that plunged 22%, and we’re now seeing that the situation got worse into late April and early May.Īpplications for mortgages to purchase a home, a leading indicator of home sales, dropped again in the latest week, and have remained solidly below the lockdown lows in April 2020, according to data from the Mortgage Bankers Association today. ![]() This is when sales volume surges and when home prices rise and when everything is rosy no matter what else is happening. ![]() The housing market is now in peak spring selling season. But unlike homeowners, homebuilders know how to sell into a down-market: by cutting prices. ![]()
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