Declining Mortgage Rates Spark Uptick in Interest from Would-Be Homebuyers
Mortgage applications are up about 25% from the end of 2022.
Back in November, mortgage rates reached a 20-year high of 7.08%, pricing out millions of would-be buyers and leading to a lull in the housing market. Now, as rates have steadily declined, buyers are circling back.
The average 30-year mortgage rate is 6.51%, still about 3% above the average from a year ago, but the decline has nonetheless sparked a 25% increase in mortgage applications since the end of 2022, The Wall Street Journal reported. The slight uptick in applications could signify that interested buyers have come to terms with the current reality of high rates and are swooping in to take advantage of declining prices.
"They are less focused on the specific rate than they are on identifying a window of where they are comfortable with their monthly spend," Steven Centrella, a Redfin real-estate agent in the Washington, D.C. area, told the outlet.
Related: Mortgage Interest Rates Fall to Lowest Level Since September, Mortgage Demand Rises
According to Redfin data, the number of individuals contacting real estate agents with plans to buy has rebounded this week after November lows.
However, despite the slight uptick in buyers, the market is still down when compared to numbers from a year ago. Existing home sales were down by 1.5% in December 2022, marking the 11th consecutive month of decline, according to The National Association of Realtors. The numbers for January 2023 will be released later this month.