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Consumers continue to grow more interested in mortgages

March 22, 2017

For some time now, consumers have grown increasingly interested in obtaining a mortgage - particularly when it comes to buying properties - thanks to the improving economy and long-held dreams of homeownership. In recent years, millions of Americans have benefited from economic recovery and potentially been put in a position to buy, allowing the mortgage market to take a step forward even as rates continue to rise nationwide.

In the week ending March 10, the total number of home loan requests filed nationwide rose by a seasonally adjusted 3.1 percent from the previous seven-day period, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association. Interestingly, that push was largely driven by an increased interest in refinancing among current homeowners, for which applications jumped 4 percent, while those for new home purchases only rose 2 percent. However, purchase requests were also up 6 percent on an annual basis.

The increase in refinance requests came despite the fact mortgage rates rose sharply over the course of the previous week.

Building on the rise
One of the big impediments to consumers looking to buy homes, though, isn't related to interest among buyers. On the contrary, anecdotal evidence suggests there are huge numbers of would-be buyers pouring into the market but relatively few homes up for sale. Now, builders are trying to alleviate pent-up demand, and consumers are quickly moving to scoop up newly built homes, according to the MBA's latest Builder Application Survey.

In February, the number of applications for newly built properties jumped 2.2 percent on an annual basis, and 16 percent from January, with builders scrambling to stay ahead of demand, the report said. In all, the expected supply of new single-family homes rose 4.3 percent from January.

"The Builder Application Index posted a modest annual gain in February 2017," said Lynn Fisher, MBA's Vice President of Research and Economics. "The bar was high as last February was a particularly strong month for applications, as was March 2016. The surprisingly strong employment numbers for the beginning of 2017 suggest that demand for new homes should continue to grow this year. Additionally, based on the current reading, we expect seasonally adjusted new home sales to be up by about 8 percent in February compared to a year ago."

Lenders making credit more available
One of the big issues when it came to buying a house in recent years was lenders keeping a tight control on mortgage credit for most would-be buyers, but that's beginning to change, according to the MBA's latest Mortgage Credit Availability Index. In all, the MCAI ticked up 0.4 percent to a reading of 177.8 through the end of February, indicating that it was slightly easier to get a home loan these days. That index was set to a benchmark of 100 in March 2012, but the market still has a long way to go to get even close to replicating pre-recession norms.

With all this in mind, as well as rising rates and prices, the more quickly consumers can get into the market, the better off they're likely to be when it comes to locking in an affordable loan and getting credit approval.




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