Mortgage News

The number of mortgage applications for purchasing a home increased 1% this past week, pushing demand to its highest level in two months, according to the Mortgage Bankers Association. Home purchase applications also increased 7% from this time last year. However, applications for mortgage refinance loans fell 5% this last week, as mortgage rates were essentially unchanged this week.

Even as mortgages rates remained elevated and more inventory came on the market, U.S. home prices continued to rise in January. The seasonally adjusted S&P CoreLogic Case-Shiller Index increased 0.6% in January from the month before. Home prices also rose 4.1% compared with the year earlier. The continued upward climb of prices indicates that there is enough homebuyer demand, especially from repeat buyers with lots of current equity, to overcome higher rates to some extent.

Sales of previously owned U.S. homes increased 4.2% in February from the month before, according to the National Association of Realtors, a welcome surprise as industry analysts had forecasted a 3% drop. The sales are based on contract closings, which means they were first signed in December or January when rates were rising above 7%. As rates have since fallen to the mid-6% range, existing home sales may see an even bigger jump in the March and April data.

The number of new U.S. housing starts jumped 11.2% in February to a seasonally adjusted annual rate of 1.50 million units, according to the U.S. Department of Housing and Urban Development, a move that surprised economists and market experts. The gain in housing starts was entirely fueled by the West where they increased by 20.2%; starts fell in the rest of the country, with a 21.5% decline in the Midwest, a 8.3% decrease in the South, and a 4.7% fall in the Northeast.

Pending U.S. home sales dropped 6.4% in the four weeks ended March 2 from the year before, according to Redfin, marking the second-biggest decline since November 2023. Pending home sales, measured by homes under contract for sale, were limited by the median U.S. sales price rising 3.2% and the typical homebuyer’s monthly housing payment being just $26 below its all-time high.  However, 30-year fixed mortgage rates have fallen for most of the past month, which could give a boost to home sales.

Home loan credit was easier to come by in February, according to the Mortgage Bankers Association. The MBA’s mortgage credit availability index rose 1.4% last month, compared to January, and up to its highest level in almost two years, since March 2023. The loosening of lending standards was led by increased credit offerings among conventional and government loans, thanks to “greater investor appetite for ARM and cashout refinance loans.”

Total mortgage application volume soared 20.4% during the week ended March, 5, 2025, according to the Mortgage Banker Association, thanks to a recent decline in long-term mortgage interest rates. The increase was led by whopping 37% jump in refinance requests. The average rate on a 30-year fixed-rate mortgage fell to 6.73% from 6.88% during the same time, have decreased for the past seven straight weeks. Applications for home purchase mortgages rose 9% for the week.

While it has slowed down, U.S. home price growth still rode to an new all-time high in December 2024, according to the Case-Shiller U.S. National Home Price Index. The index increase 3.9% from the month before when it rose 3.8%, marking the 19th straight all-time high growth pace. Prices rose the fastest in Chicago (6.6%), Boston (6.35%) and Seattle (5.61%.) Prices fell in only one metro area: Tampa, Florida with a 1.11% decrease.

In a welcome move for potential homebuyers, long-term mortgage rates fell to their lowest level in over two months, according to Freddie Mac. The 30-year fixed-rate mortgage average fell to 6.76% during the week of February 27, 2025, down from 6.85% the week before and down from 6.94% a year ago. The last time rates were this low was during the week of December 19, 2024. Freddie Mac analysts say this trend of falling rates, coupled with modestly improving inventory, should encourage more mortgage activity soon.

Long-term mortgage interest rates dropped to their lowest level in two months, but it wasn’t enough to entice borrowers to the mortgage table, according to the Mortgage Bankers Association. Total mortgage application volume fell 1.2% during the week ended February 26, 2025, based on the MBA’s seasonally adjusted index. That decline was led by a 4% decrease in refinance requests; home purchase applications were flat from the week before. Meanwhile, the average rate on a 30-year fixed-rate mortgage fell to 6.88% down from 6.93% a week earlier.

Long-term mortgage interest rates declined for the fifth consecutive week, breathing some hope back into the potential buyer market, according to Freddie Mac. During the week ended February 20, the average rate on a 30-year fixed-rate mortgage slipped to 6.85%, down from 6.87% the week before and down from 6.90% a year ago. The 30-year average has been under 7% for the past five weeks and has stayed within a tight 20 basis point range, hopefully providing some stability for refinancers and buyers.

U.S. homebuilders are feeling pessimistic about the housing market, as they worry about how newly-introduced tariffs will raise their building costs, according to the National Association of Home Builders. The NAHB Housing Market Index, which measures home builders’ sentiment about current conditions, fell 5 points in February to a level of 42, the lowest reading in five months. Anything below 50 reflects negative attitudes. Builders anticipate that President’s Trump’s new tariffs on Canada and Mexico will significantly increase the prices of many building materials sourced internationally.

Rising housing costs are keeping more buyers away from the market, even as the supply of homes reaches record highs, according to Redfin. Active listing of homes for sale climbed in January, up 0.3% from December and a giant 12.9% increase from a year earlier. New listings are now at their highest level since 2020. However, with rising home prices and high mortgage rates, few buyers are biting. Pending home sales dropped 4.2% in January from the month before and 6.3% from January 2024. That marks the largest decline since August 2023.

It was a little easier to get a mortgage in January than the month before, according to the Mortgage Bankers Association. The MBA’s Mortgage Credit Availability Index rose 2.5% in January to 99.0, with any increase indicating a loosening of mortgage lending standards.  Jumbo loans saw the largest increase in available credit with a 5.3% jump  from December. Conventional loans also saw looser credit with a 3.8% increase. The MBA says there were expanded conventional loan offerings in January especially for cash-out refinances.

The volume of refinance applications jumped 12% in the past week, as mortgage rates on 30-year fixed-rate loans fell to their lowest level in six weeks, according to the Mortgage Bankers Association. Refinance requests were also up 17% from a year ago. However, home purchase loan applications fell 4% from the week before, as potential buyers struggle to keep up with higher prices and loan payments.