For those of you who are embarking on the journey of buying your first home, here's a helpful update on what's happening in the housing market and mortgage industry.
Recently, there was a small but encouraging increase in mortgage application volume, all thanks to a drop in adjustable mortgage rates. The Mortgage Bankers Association (MBA) shared some good news while tracking mortgage application activity. Applications went up by 0.6 percent after taking a 6.0 percent dip the week before. On a simpler note, this means more people started applying for mortgages again after a slight slowdown.
Refinancing, which is when homeowners switch to a new mortgage with better terms, also saw a little boost of 0.3 percent compared to the previous week. However, it's important to note that refinancing activity is still lower than it was a year ago. So, if you're considering refinancing, it's a good idea to check if it makes sense for your situation.
If you're looking to buy your first home, you'll be interested in the Purchase Index, which measures new home purchases. It went up by 1 percent compared to the previous week, which is a positive sign. However, it's still significantly lower than the same week last year, so there's still room for improvement.
One interesting development is the rise in Adjustable Rate Mortgage (ARM) applications, which increased by 15 percent. This brought the share of ARM applications to 9.2 percent of all mortgage applications, the highest it's been since November 2022. What's important to note about ARMs right now is that their rates have gone down while fixed rates have gone up. So, if you’re eager to get into a home, speak to your mortgage lender about this option.
First-time home buyers like you might find this market a bit challenging, especially when purchase applications are still about 20 percent lower than last year's levels.
So, while the mortgage market is seeing some fluctuations, there are still opportunities out there for first-time home buyers. Keep an eye on interest rates, and if you're thinking about buying or refinancing, it might be a good time to talk to a mortgage professional and explore your options.
