In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses mortgage applications.
- The number of mortgage applications to purchase a home continued to rise. The latest week shows a 9 percent jump from one year prior. From September of this year the figure has been running about 10 percent above the comparable period from the prior year.
- This data interestingly was the last to recover. Home sales of both new and existing homes had been rising solidly from the beginning of the year. One reason for the disparity could be due to the high number of homes that are sold all-cash, and hence are not picked up by mortgage data.
- The number of mortgage applications for refinance continued to do well, up 47 percent from one year ago. Record low mortgage rates are helping. A big caution for mortgage lenders is that the volume of business related to refinancing will slow significantly next year. The Blue Chip Consensus forecast is calling for the 30-year fixed mortgage rate to reach 3.9 percent by the fourth quarter of 2013, up from the current 3.4 percent. The source of business growth next year will be primarily for home purchase applications.
