Last week, according to the Mortgage Bankers Association (“MBA”), applications for new homes dropped by roughly 5% from the prior week. Simultaneously, the average loan reached a 30-year high; the average loan currently sits at $402,200 (up for $398,600 the previous week).
Experts in the field of forecasting markets believe these numbers indicate that the demand for homes, while marginally diminished, is still exceptionally strong. While the first week of February 2021 saw a decline in applications, it still represented a 17% increase over the first week of February 2020; according to the MBA, mortgage volume is up 46% compared to the first week of February 2020.
The slowdown in applications is widely attributed to the increase in the 30-year fixed-rate mortgage (“FRM”), which increased to 2.96% from 2.92% a week earlier; this increase represents the fourth time in six weeks that rates have been increased. While this may be a signal that the golden era of mortgage loans is coming to a close, the housing market shows no sign of slowing down. While low mortgage rates certainly helped drive the market, the real driving force has been low inventory; inventory will not change for some time.
At the Chernov Team we understand that knowledge is power, and knowledge of how the market is behaving is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.