Mortgage demand stirs back to life as interest rates plummet
FOX Business correspondent Madison Alworth shares why for many first-time homebuyers, the American dream is delayed as a result of high mortgage rates and home prices on 'Varney and Co.'
A key measure of home-purchase applications rose for the first time in a month last week as consumer demand stirred back to life amid a sharp drop in mortgage rates.
The Mortgage Bankers Association's (MBA) index of mortgage applications rose 2.5% last week, compared with the previous week, according to new data published Wednesday.
The data also showed that the average rate on the popular 30-year loan plunged to 7.61%, marking the biggest single-week decline since mid-2022.
«Last week’s decrease in rates was driven by the U.S. Treasury’s issuance update, the Fed striking a dovish tone in the November FOMC statement, and data indicating a slower job market,» said Joel Kan, MBA's deputy chief economist.
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Available home supply remains down a stunning 45.1% from the typical amount before the COVID-19 pandemic began in early 2020, according to a recent report from Realtor.com. (David Paul Morris/Bloomberg via / Getty Images)
The decline in rates helped to spur more housing demand, with applications for a mortgage to purchase a home also rising 1% for the week. Still, application volume remains down 20% compared with the same time last year.
Demand for refinancing also inched higher last week, rising 2% from the previous week, according to the survey. Compared with the same time last year, refinance applications are down 7%.
«Applications for both purchase and refinance loans were up over the week but remained at low levels,» Kan said. «The purchase index is still more than 20%
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