The mortgage market had a bang-up week with applications for both purchase mortgages and refinancing contributing to a 10% jump in volume. Refinancing remained strong with applications up 11% on top of a 7% increase the week before, but it was applications for home purchases that gladdened hearts. After a lackluster March in which the volume rose or fell each week by low single digit numbers, there was a surge of 8% on a seasonally adjusted basis and the Mortgage Bankers Association's (MBA's) Purchase Index was up 24% compared to the same week in 2015.
MBA projects a surge in new homes sales as well. Based on reports of applications for purchase mortgages received by mortgage subsidiaries of home builders, MBA estimated newly construction home sales were up by 17% in March.
Those increases are probably a sign that the spring market is kicking into gear but also are indicative of the lure of continued low rates. Freddie Mac's average 30-year rate was down again, reaching a new low for the year, 3.58%. That is 43 bps lower than on New Year's Eve.
Maybe the best is yet to come. MortgageNewsDaily rate analyst Matthew Graham told CNBC this week that he sees "the ingredients in place for new all-time lows sometime soon." Graham cited concerns over the trajectory of the global economy, oil prices that haven't been able to consolidate gains, worries over a stock correction, and the volatile race for the White House. "You have the makings for quite the rate-friendly environment," Graham said.
A long term study by two Harvard economists has stratified U.S. counties according to the upward mobility outcomes of low income children raised there. Now Zillow analyst Sarah Mikhitarian has merged those results with home price data and found the counties with the greatest upward mobility have also seen the greatest recent increases in home prices. The differences were not small either. The gap in average home values between the top 25% of socially mobile counties and the bottom 25% almost tripled over the nearly 20 years of the Harvard study–from 56.1% in the late 1990s to 147% last year.
Trulia Chief Economist Ralph McLaughlin says tight inventories and likely higher prices probably mean a sellers' market this spring. He added that cities on the West Coast and in the Northeast have the fewest homes on the market so are most advantageous for sellers. If you are thinking about selling apparently there might be no time like the present.