Mortgage applications at Bank of America jumped 80% between January and March. Some of that is seasonality with the spring home-buying season kicking off, but not all.
Typically the bank sees about a 60% increase in applications this time of year. In January, mortgage rates were hovering around 7%. By March, they’d come down closer to 6.5%.
Allen Seelenbinder at Bank of America said in this market even that small of a dip can make a difference.
“The slight change in interest rates and also the slight increase in housing inventory,” Seelenbinder said, adding that both helped drive up mortgage applications recently.
Danielle Hale, chief economist at Realtor.com said it’s too early to say whether that’s a good sign for the housing market with other recent data being mixed. Pending home sales, for example, are down almost 4% compared to a year ago.
“Mortgage applications are up, but pending home sales are down,” Hale said. “That might suggest that more buyers in the market today are using mortgages as opposed to cash buyers.”
That doesn’t necessarily mean more people are buying homes. Chris Mayer at Columbia Business School said there’s not much to indicate the market is really picking up.
“Overall the spring selling market is kind of a bit slower than people kind of hoped it would be,” he said.
Some of that is perennial affordability issues, but Mayer also said some of it is uncertainty.
“The nervousness in the economy, the nervousness about policy, there’s some of that that is hitting the housing market,” he said.
With headlines about car prices, and other goods, potentially spiking soon, Mayer said people may be wondering if now is the moment to buy a home.
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