Total mortgage application volume increased 7.4% last week after falling to a 28-year low the previous week, but high home prices are still forcing prospective buyers to stretch their budgets in order to compete in a spring market just starting to heat up. Mortgage applications to purchase a home rose 7% for the week and were 42% lower than the same week one year ago, while applications to refinance ticked up 9% week to week but remained 76% lower than the same week one year ago, CNBC reports.
Despite a gradual increase in buyer activity, most house hunters are still hesitant to dish out more money for home purchases, and as a result, for-sale homes are spending more time on the market.
“Even with higher rates, there was an uptick in applications last week, but this was in comparison to two weeks of declines to very low levels, including a holiday week,” noted Joel Kan, an MBA economist.
The jump in demand could just be the start of the traditionally busy spring market. The share of adjustable-rate mortgage applications, however, rose last week, suggesting more buyers are stretching to afford today’s still pricey housing market. ARMs offer lower interest rates at higher risk.
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