Mortgage Demand Rises

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Mortgage Demand Soars Amid Growing Optimism for 2024

Mortgage demand is heating up as interest rates hit their lowest level in over a month, applications for home loans have surged. “Homebuyer demand for mortgages jumped 6%,” driven by a drop in the average 30-year fixed-rate mortgage, now at 6.69%, down from 6.86%. According to the Mortgage Bankers Association (MBA), applications to purchase homes rose to their highest level since January, increasing 6% for the week.

MBA economist Joel Kan stated, “The recent strength in purchase activity continues, supported by lower rates and higher inventory levels, which are giving prospective buyers more options compared to earlier in the year.”

However, refinancing activity dipped by 1%, as many borrowers are holding onto lower rates secured in previous years. Investors are also watching geopolitical events and key economic data expected this week, which could further impact mortgage rates.

The housing market remains active as buyers and investors adapt to rate changes. With the current decline in mortgage interest rates, many potential buyers see opportunities to secure better terms. Meanwhile, refinancing activity reflects caution among borrowers who locked in historically low rates earlier.

As geopolitical developments unfold, economists anticipate further shifts in the lending landscape. Lower mortgage rates are helping stabilize demand, while higher housing inventory is providing buyers with more choices. The industry continues to monitor economic indicators, as changes in rates could drive even greater activity.

The Mortgage Bankers Association highlights how fluctuations in rates influence the broader housing market. For now, the focus remains on how home loan applications and refinancing activities shape the overall outlook.

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Realtor.com’s 2025 Housing Forecast

The 2025 housing market outlook is mixed, according to Realtor.com. The platform projects 4 million existing home sales—one of the lowest forecasts in the industry—but predicts a 3.7% rise in home prices and an 11.7% increase in inventory.

Chief Economist Danielle Hale highlighted, “While more inventory means buyers will likely have more time to make purchase decisions in 2025, in any market, a fast-acting buyer will have a higher likelihood of making the winning offer.”

The forecast also accounts for potential economic shifts under the re-elected Trump administration. Proposals like tariffs on trade partners and changes in immigration policy could impact affordability and labor supply in construction, further shaping the market’s trajectory.

Source: Link

New Home Sales Hit a Low

The National Association of Home Builders (NAHB) reported that new home sales dropped 17.3% in October, marking the lowest rate in two years. Rising mortgage rates and affordability challenges have kept many buyers on the sidelines.

Carl Harris, NAHB Chairman, remarked, “The decline in new home sales underscores the challenges faced by prospective buyers dealing with tighter budgets and higher borrowing costs.”

Despite the challenges, ready-to-occupy inventory grew 52.6% year-over-year, emphasizing the critical role of new construction in meeting demand.

Source: Link

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