Connect with us

Hi, what are you looking for?

Oracle of  Omaha SaysOracle of  Omaha Says

Stock

Mortgage demand grows, driven by sales of new homes

Mortgage rates turned higher again last week. But the increase did not cut into mortgage demand, as buyers sought newly built homes.

Total mortgage application volume rose 3% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. An additional adjustment was made for the Juneteenth holiday.

Applications for a mortgage to purchase a home rose 3% for the week but were 21% lower year over year. These applications have increased for three straight weeks to the highest level since early May, despite still-high mortgage rates.

“New home sales have been driving purchase activity in recent months as buyers look for options beyond the existing-home market,” said Joel Kan, MBA’s vice president and deputy chief economist, in a release. “Existing-home sales continued to be held back by a lack of for-sale inventory as many potential sellers are holding on to their lower-rate mortgages.”

Sales of newly built homes in May soared 12% compared with April and were 20% higher than May 2022, according to a report Tuesday from the U.S. Census. Builders are driving demand in part by offering incentives, like paying down mortgage rates.

Last week the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.75% from 6.73%, with points remaining at 0.64 (including the origination fee) for loans with a 20% down payment. The average rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) rose more sharply to 6.91% from 6.80%.

More from CNBC

Nvidia dips on report U.S. considering new A.I. chip export restrictions for China Google cuts jobs at Waze as it continues to merge mapping products Treasury yields dip as investors weigh interest rate outlook

“The spread between the jumbo and conforming rates widened to 16 basis points, the third week in a row that the jumbo rate was higher than the conforming rate,” Kan said. “To put this into perspective, from May 2022 to May 2023, the jumbo rate averaged around 30 basis points less than the conforming rate.”

The widening spread and the increase in the jumbo rate stem from the recent regional bank failures. Lenders hold jumbo loans on their balance sheets, because Fannie Mae and Freddie Mac don’t buy loans of that size. Bank credit, especially at community banks, has tightened substantially, resulting in higher rates.

Applications to refinance a home loan rose 3% for the week but were 32% lower than the same week one year ago. The vast majority of borrowers today have mortgages with interest rates below 4%.

This post appeared first on NBC NEWS
Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.






    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.
    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Latest News

    A former Republican legislative candidate who traveled to Washington for former President Donald Trump’s ‘Stop the Steal’ rally was arrested Friday and charged with...

    Latest News

    Abbe Lowell, Hunter Biden’s attorney, filed an ethics complaint Friday against Georgia Rep. Marjorie Taylor Green after she displayed censured nude photos of the president’s...

    Stock

    Even as U.S. inflation broadly cools, frozen vegetable prices are hot. The average shelf price for frozen veggies rose by 18% in the past year...

    Latest News

    President Biden has overruled the Pentagon and chosen Adm. Lisa Franchetti to lead the Navy, making her the first woman, if she’s confirmed, to...

    Disclaimer: Oracleofomahasays.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2024 Oracleofomahasays.com