Home purchase mortgage applications rose by 8 percent for the week ending April 7 compared with the previous week, according to data from the Mortgage Bankers Association (MBA). This increase was likely spurred in part by interest rates for 30-year fixed rate mortgages with conforming loan balances declining to 6.3 percent, its lowest point in over two months.
“Incoming data… showed that the job market is beginning to slow, which led to the 30-year fixed rate decreasing to 6.30 percent – the lowest level in two months,” MBA Senior Vice President and Chief Economist Mike Fratantoni said. “Prospective homebuyers this year have been quite sensitive to any drop in mortgage rates, and that played out last week with purchase applications increasing by 8 percent.”
Though purchase mortgage applications saw a notable rise for the week ending April 7, the application number was still 31 percent lower than the same time one year prior, when the Federal Reserve was just beginning its increases to the federal funds rate, and interest rates were significantly lower.
Over the past year, buyers have been up against not only higher rates and higher home prices, but very limited supply. As purchases have slowed, however, the inventory of homes for sale has begun to rebound.
According to March housing market data from realtor.com, the number of homes for sale increased by nearly 60 percent compared with one year ago. The current housing supply is still substantially lower than pre-pandemic numbers, with supply approximately half of what was available in March 2019.
Inventory increased in 47 out of 50 of the largest metros compared with last year. Metros which saw the most inventory growth include Austin, Texas, (312.2 percent), Raleigh, N.C., (273.7 percent), and Nashville, Tenn. (253.3 percent). The only metros which saw inventory decline on a year-over-year basis were Milwaukee (-17.2 percent), Hartford, Conn., (-17 percent), and New York (-0.9 percent).
Despite high inventory growth compared with last year, most metros still had a lower level of inventory when compared to pre-pandemic years. In fact, only Austin (2 percent), and Las Vegas (1.4 percent) saw higher levels of inventory in March compared with typical 2017 to 2019 levels.