US home-purchase applications increase in first week of 2024
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APPLICATIONS for home-purchase mortgages in the US increased last week by the most since June as borrowing costs hovered near a seven-month low.
The Mortgage Bankers Association’s gauge of mortgage applications to buy a home increased 5.6 per cent in the week ended Jan 5, which included the New Year’s Day holiday. An index of overall mortgage applications, which also includes refinancing, climbed 9.9 per cent, the sharpest advance in nearly a year.
They tend to be more volatile around holidays, helping explain some of the big drops and rises in recent weeks.
The contract rate on a 30-year fixed mortgage ticked up 5 basis points to 6.81 per cent, its second straight increase. Overall, rates are hovering around levels seen last summer and below the highs reached during the fall, when they approached 8 per cent.
Existing-home sales have edged up recently and new-home purchases have generally been improving, despite some bumps, as the Federal Reserve signalled it has finished boosting borrowing costs. Lawrence Yun, chief economist at the National Association of Realtors, said last month it will take a few months to see buyers respond to the lower interest rates.
The MBA’s report also showed an 18.8 per cent surge in applications to refinance.
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The MBA survey uses responses from mortgage bankers, commercial banks and thrifts and has been conducted weekly since 1990. The data cover more than 75 per cent of all retail residential mortgage applications in the US. BLOOMBERG
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