Housing supply is improving as the spring home buying season approaches. (iStock)
Mortgage lending continued to decline significantly in the fourth quarter of 2023, but recent reports indicate that things are starting to turn around.
According to the newspaper, soaring house prices, soaring borrowing costs and weak housing supply have pushed lending rates to their lowest level in 20 years, with loan activity down 16.5% year-on-year, from the highest level in the first quarter of 2021. decreased by 67.7%. report Written by Atom. Mortgage loans issued by lenders in the fourth quarter of 2023 were $417.4 billion, down 14.9% from the third quarter of 2023 and down 18.6% from the fourth quarter of 2022.
But mortgage lending surged nearly 30% last spring, and if mortgage rates continue to fall and housing supply improves as expected, rates could rise again this spring.
“Multiple powerful forces continued to conspire against the mortgage industry in the fourth quarter, cutting off large portions of the business,” said Rob Barber, CEO of ATTOM. “During the 2022 peak purchasing season, there were signs that things were starting to turn around, with an increase in purchases, refinances, and HELOC transactions. The same thing could happen recently.
“However, the fourth quarter numbers made clear that no matter how you slice the pie, things remain bleak for lenders,” Barber continued.
Homebuyers can find better mortgage rates by researching and comparing their options. Visiting an online marketplace like Credible lets you compare interest rates, choose a loan term, and get pre-approved from multiple lenders at once.
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As spring approaches, supply increases.
Economists at Realtor.com predict that mortgage rates will fall to the 6% region in 2024. fannie mae We expect mortgage rates to decline gradually over the next two years, reaching 6.9% for a 30-year mortgage by 2025. first american economist He pointed out that mortgage interest rates will remain in the range of 6.5% to 7.5%.
Lower interest rates could help build much-needed housing supply.According to a recent Redfin report, some homeowners have already sold. report. The number of new listings nationwide increased by 13% year-on-year in the four weeks ending March 3, marking the first significant increase in about three years. Housing prices also lost momentum. About 5.5% of home sellers lowered their asking prices, the highest percentage for February since at least 2015.
“Last year, there were two major hurdles for homebuyers: low inventory and high home prices,” said Chen Zhao, head of economic research at Redfin. “Now, as more supply enters the market, the initial barrier is starting to come down.Housing costs remain high, but housing costs will come down a bit as mortgage rates gradually fall throughout the year and price increases lose some momentum. Probability is high”
“Buyers who can afford current mortgage rates may have better luck finding a home now than they have in the past few months, and may also face less competition as inventory improves. No,” Zhao continued.
Even if you’re looking to become a homeowner, shopping around can help you find the best mortgage rates. Online marketplaces like Credible can help you compare options.
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Creative ways to make housing affordable
First-time homebuyers are finding ways to pave their way to homeownership. For example, many young Americans planning to buy a home next year rely on side income to generate cash, according to Redfin. investigation.
41% of Gen Z and 36% of Millennials said they had a side job to save up for a down payment, and about a quarter said they planned to use cash gifts from family members. These days, he says, some people have chosen house hacking to help pay their mortgages and other bills, according to Realtor.com. report. This is when a buyer buys a home with the intention of renting it out on a long-term or short-term basis.
The group buying trend is another way for young buyers to share the costs of homeownership, the report said. Group purchasing can help friends and family pool their funds to come up with the down payment and closing costs. It’s also a way to share high monthly mortgage payments, utility bills, maintenance and repair costs.
If you’re considering becoming a homeowner, it may be helpful to shop around to find the best mortgage rates. Visit Credible to compare options from different lenders and choose the one with the best interest rate.
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