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Mortgage applications for home purchases—a gauge of future homebuying activity—were up 13% in the week ending May 2 compared to a year ago, the Mortgage Bankers Association reported Thursday. Mortgage rates have barely budged but home buyers appear to be jumping into the market this spring, despite elevated home prices in most markets.
Last week, the National Association of REALTORS® reported that pending home sales—another forward-looking indicator of home sales based on contract signings—posted the largest month-to-month increase since December 2023, climbing 6.1% in March compared to February.
The rise in pending home sales could hint at a turnaround, Lawrence Yun, NAR’s chief economist, said in the report. “While contract signings are not a guarantee of eventual closings, the solid rise in pending home sales implies a sizable buildup of potential home buyers, fueled by ongoing job growth,” he notes.
Michael Fratantoni, senior vice president and chief economist at MBA, says a recent surge in borrower demand for conventional loans is a “surprisingly strong move given lingering economic uncertainty.” He says conventional loans lately tend to have larger loan sizes—likely due to higher home prices—and are more likely tend to be from move-up, repeat buyers.
Mortgage Rate Averages This Week
“Mortgage rates stayed flat this week,” says Sam Khater, Freddie Mac’s chief economist. But that’s a big improvement over a year ago: “At this time last year, the 30-year fixed-rate mortgage was 30 basis points higher and purchase applications were declining,” Khater says. “Today, rates are lower and have remained stable for weeks, sparking continued increases in purchase applications.”
Freddie Mac reports the following national averages for the week ending May 8:
- 30-year fixed-rate mortgages: averaged 6.76%, unchanged from last week. A year ago, at this time, 30-year rates averaged 7.09%.
- 15-year fixed-rate mortgages: averaged 5.89%, dropping from last week’s 5.92% average. A year ago, 15-year rates averaged 6.38%.
