Real Estate Rebound: Demand for New Mortgages Jumps 28% in One Week

Portrait of a happy woman and a man, holding keys from the new first house, a young family of two celebrating moving day, satisfied customers couple purchase real estate, mortgage, and relocation concept.
Studio4 / Getty Images

The U.S. housing market’s topsy-turvy ride shows no sign of letup in the new year, as mortgage applications rose sharply last week despite fears that home sales will keep sinking in 2023.

See the List: GOBankingRates’ Best Banks of 2023
Read: 3 Things You Must Do When Your Savings Reach $50,000
Find: Why Buying Property in These Vacation Destinations Could Be a Great Investment

Mortgage applications for the week ending Jan. 13, 2023, rose a whopping 27.9% from the prior week, according to data released Wednesday by the Mortgage Bankers Association (MBA). The uptick was due to a combination of falling mortgage rates and the normal post-holiday rise in applications.

The average contract interest rate for a 30-year fixed-rate mortgage backed by the FHA fell to 6.26% during the week ended Jan. 13, the MBA reported. That compares to 6.39% a week earlier.

“Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall,” MBA chief economist Mike Fratantoni said in a news release. “As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers.”

Building Wealth

Although Fratantoni noted that mortgage application activity “rebounded strongly” in the first full week of January, he quickly added that purchase volume still remains 35% below year-ago levels.

The housing market has been in a months-long slump because of historically high home prices and mortgage rates that have more than doubled over the past year. Home sales in November 2022 fell for the 10th month in a row — the longest such streak since 1999.

As far back as August, the National Association of Homebuilders (NAHB) said the U.S. was in a “housing recession,” citing a slowdown in home sales, mortgage applications and single-family starts.

“We’re seeing decade-low readings for just about every index that you can imagine for housing,” NAHB chief economist Robert Dietz told Quartz in a recent interview.

Despite the recent surge in mortgage applications, most housing experts see a tepid market in the months ahead. As GOBankingRates reported, some observers believe the playing field will be evenly balanced between buyers and sellers in 2023 after sellers held all the best cards during the previous couple of years.

Take Our Poll: Are You In Favor of More Inflation Relief in 2023?
More: Applying for a Mortgage? Here’s What Your Debt-to-Income Ratio Should Be

Building Wealth

One problem facing the U.S. housing market is an ongoing lack of available homes for sale. Redfin estimates that active listings are up about 21% from a year ago, CNBC reported. But that’s mostly because homes are sitting on the market longer. Meanwhile, sales continue to decline, while new home listings are down 22% year over year.

More From GOBankingRates

Share This Article:

facebook sharing button
twitter sharing button
linkedin sharing button
email sharing button
Building Wealth

About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
Learn More

BEFORE YOU GO

See Today's Best
Banking Offers

1pximage