{"id":146533,"date":"2023-01-30T08:56:33","date_gmt":"2023-01-30T15:56:33","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=146533"},"modified":"2024-01-19T10:49:38","modified_gmt":"2024-01-19T17:49:38","slug":"mortgage-applications-are-up","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/mortgage-applications-are-up","title":{"rendered":"Mortgage Applications Rise As Rates Continue To Fall Back"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC8803019395\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p><span data-preserver-spaces=\"true\">Prospective homebuyers have been waiting for more affordable conditions, and according to data from the Mortgage Bankers Association, they might be ready to start making offers. Mortgage demand&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/tradingeconomics.com\/united-states\/mortgage-applications\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">surged 7%<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in the week ending January 20th after skyrocketing nearly 28% the week prior. While there have been variations in mortgage demand, often following fluctuations in the federal funds rate, a 28% increase in the volume of mortgage applications hasn\u2019t occurred since the first week of March 2020.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Meanwhile,&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.housingwire.com\/articles\/housing-market-tracker-notable-inventory-drop\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">inventory isn\u2019t growing<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;to keep pace. Homebuyer sentiment&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/homebuyer-sentiment-improves\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">improved slightly<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in December. Inflation is moderating faster than some recent expectations, and a&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2023\/01\/06\/business\/economy\/recession-soft-landing.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">growing cohort<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;of economists are betting the Fed will pull off a soft landing. Did we manage to avoid a housing market crash, and is the housing market already making a comeback?&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Mortgage Demand Is Rising Surprisingly Fast<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">While fluctuations in demand are common, the 27.9% jump in mortgage applications during the week ending January 13th is the steepest recorded since the onset of the homebuying boom in 2020. Refinance activity made a particularly robust comeback, surging 34% from the week prior, while home purchase applications were up 25%.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In the week ending January 20th, refinance applications jumped another 14.6%, while home purchase applications rose 3.4%.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Mortgage activity today still pales in comparison to a year ago, however. In the week ending January 13th, refinance demand was&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cnbc.com\/2023\/01\/18\/mortgage-demand-jumps-interest-rates-drop.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">81% lower<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;than the previous year, while home purchase applications were down 35% compared to the previous year. At that time, the average 30-year fixed mortgage rate was only 3.64%.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">While mortgage rates are still higher than they\u2019ve been&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/tradingeconomics.com\/united-states\/30-year-mortgage-rate\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">in a decade<\/span><\/a><span data-preserver-spaces=\"true\">, they\u2019ve decreased significantly from a peak of 7.08% in November. The average mortgage rate for a 30-year fixed rate home loan now sits at&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/fred.stlouisfed.org\/series\/MORTGAGE30US\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">6.13%<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;after steadily decreasing over the last three weeks. Meanwhile, more sellers are&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/seller-concessions-grew-in-q4\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">offering concessions<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;and accepting under-asking offers. While conditions may not be ideal for buyers, they\u2019re getting more favorable. That\u2019s causing demand to rebound at a time when inventory is still low.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Uncertainty Remains<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">While mortgage rate&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/when-will-the-fed-lower-rates-again\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">forecasts for 2023<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;vary from one firm to the next, December\u2019s&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2023\/01\/12\/business\/inflation-gas-discounts.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">inflation data<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;suggest that the Fed\u2019s efforts are working. Used vehicle prices, which fueled inflation in past years, have begun to come down, for example. It\u2019s possible mortgage rates could decrease further in 2023 if the consumer price index continues to fall. On the other hand, the battle against rising prices is&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2023\/01\/12\/business\/inflation-gas-discounts.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">far from over<\/span><\/a><span data-preserver-spaces=\"true\">. Services inflation has ticked up month-over-month. The Fed has indicated that it will continue with rate hikes, though slower increases of 25 basis points are expected.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">There\u2019s reason to be optimistic that the Fed will get inflation under control without causing a recession. Despite stories of layoffs in the tech sector, unemployment&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.forbes.com\/sites\/qai\/2023\/01\/22\/employment-remains-strong-and-inflation-is-receding-in-spite-of-recession-fearswhy-were-getting-mixed-signals\/?sh=e50d4067c4c9\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">remains low<\/span><\/a><span data-preserver-spaces=\"true\">, and there are more job openings than unemployed Americans \u2014 even as rate hikes are causing a contraction in economic activity and inflation begins to slow. Some economists are now&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/thehill.com\/opinion\/finance\/3819601-recession-looks-more-likely-but-less-bad\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">expecting<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;a milder recession than they originally predicted.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">But the pandemic has managed to continue impacting certain parts of the economy and disrupt supply chains. And the Fed has a long way to go before reaching its target inflation rate. The higher interest rates could begin impacting employment, causing a recession and waning homebuyer demand.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Is The Housing Market Making a Comeback?<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Some cities may be poised to rebound sooner than others since home prices have already fallen from a year ago in some pandemic boomtowns. The housing correction is well underway in cities like Austin and San Francisco, which means a turnaround in prices may happen sooner rather than later as buyer demand picks up again, according to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.redfin.com\/news\/housing-market-tracker-november-2022\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Redfin<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;Economics Research Lead Chen Zhao. But it\u2019s too early to tell if most markets will pick up speed this year. Many buyers and sellers may be&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cnbc.com\/2023\/01\/25\/mortgage-demand-jumps-as-interest-rates-drop.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">waiting to see where prices land<\/span><\/a><span data-preserver-spaces=\"true\">, leaving new inventory stalled and dampening demand.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Even if a rebound in homebuying activity occurs nationwide in 2023, it\u2019s unlikely to parallel the homebuying boom of 2021. Interest rates are likely to remain relatively elevated. At a time when mortgage affordability is a concern for prospective homebuyers, economic fears are palpable. Worries about job loss may curb the demand for homes, even if unemployment remains low. Homebuyer sentiment, while rising, remains well below 2021 levels.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">With so much uncertainty, it\u2019s even more important for investors to track weekly metrics on housing demand, like weekly data about mortgage applications from the Mortgage Bankers Association. The housing market may not be making a comeback just yet, but keeping an eye on mortgage application activity can help you make informed decisions about the best time to buy.&nbsp;<\/span><\/p>\n\n\n\n<div class=\"wp-block-group border border-gray-200 p-6 rounded-md has-slate-50-background-color has-background\"><div class=\"wp-block-group__inner-container is-layout-flow wp-block-group-is-layout-flow\">\n    \n  <div \n    id=\"segemnt-view-event-block_624f52525847f\" \n    class=\"  \"\n    x-intersect:enter.once=\"\n      analytics.track('On The Market Blog Sponsor View', {\n        referrer: 'https:\/\/www.biggerpockets.com\/blog\/mortgage-applications-are-up',\n              })\n    \">\n    \n  <\/div>\n  \n\n\n<h3 class=\"has-text-align-left mt-0 wp-block-heading\"><strong>On The Market is presented by Fundrise<\/strong><\/h3>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png\" alt=\"\" class=\"wp-image-142373\" width=\"256\" height=\"63\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-300x74.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-768x189.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black.png 1380w\" sizes=\"auto, (max-width: 256px) 100vw, 256px\" \/><\/figure>\n\n\n\n<p class=\"mb-0\" style=\"font-size:16px\"><strong>Fundrise is revolutionizing how you invest in real estate.<\/strong><\/p>\n\n\n\n<p class=\"mt-0 has-slate-600-color has-text-color\" style=\"font-size:16px\">With direct-access to high-quality real estate investments, Fundrise allows you to build, manage, and grow a portfolio at the touch of a button. Combining innovation with expertise, Fundrise maximizes your long-term return potential and has quickly become America\u2019s largest direct-to-investor real estate investing platform.<\/p>\n\n\n\n<div id=button-custom-event-block_624f4a1837234 class='button-custom-event'>\n      <a href=\"https:\/\/t.sidekickopen84.com\/s3t\/c\/5\/f18dQhb0S7kF8cpngfW16gy-_59hl3kW7_k2841CX6NGN35Qwt3rN_mgW56Jw3w1HcgXpf197v5Y04?te=W3R5hFj26QkH2W4hJTY63T3pkxW3Fbt5S3Cdl5cf49M_4s04&#038;si=8000000019411002&#038;pi=6988e0ed-1aea-4af5-9769-8a0de4675eeb\" x-on:click=\"window.analytics.track(&#039;On The Market Blog Sponsor Click&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/mortgage-applications-are-up&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\" rel=\"noopener\">Learn more about Fundrise<\/a>\n  <\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Prospective homebuyers have been waiting for more affordable conditions, and according to data from the Mortgage Bankers Association, they might be ready to start making offers. Mortgage demand&nbsp;surged 7%&nbsp;in the [&hellip;]<\/p>\n","protected":false},"author":613615,"featured_media":146534,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8,7119],"tags":[],"class_list":["post-146533","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-trends","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/146533","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613615"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=146533"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/146533\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/146534"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=146533"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=146533"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=146533"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}