Mortgage applications are up, a sign the housing market may be thawing, according to The Wall Street Journal (subscription).
What’s going on: “The average 30-year home loan rate has come down by just about a full percentage point from a 20-year high above 7% in November, largely in response to signs that the Federal Reserve is nearly finished lifting rates. That has brought some new buyers into the market.”
- Mortgage applications increased by approximately a quarter since the end of 2022, and the number of people contacting real-estate agents about looking at homes for purchase has risen since a November low.
Why it’s important: The housing market is seen as a proxy for overall economic health.
- While the Federal Reserve has indicated that it will keep interest rates high until inflation comes down, some economists say the worst of the housing downturn is over.
What’s expected: Net housing sales are likely to increase from Q1 to Q2 of this year, according to homebuilder D.R. Horton Inc. Spring tends to bring more buyers and sellers, they said.
- And “[r]eal-estate agents say buyers have adjusted to the reality that higher mortgage rates will eat up more of their monthly housing costs.”
- Affordably priced homes, however, are expected to remain in relatively scarce supply this year.