Mortgage Demand Reaches Two-Month High as FHA Applications Surge

Mortgage demand from homebuyers reached its highest level in nearly two months, with applications for home purchases rising 1% week-over-week and 7% year-over-year, according to the Mortgage Bankers Association. This increase is attributed to a 6% rise in FHA applications, aided by easing housing inventory and slightly falling mortgage rates. Despite this uptick, total mortgage application volume still declined by 2%, largely due to weaker refinance demand, which dropped 5%. The average contract interest rate for 30-year fixed-rate mortgages slightly decreased to 6.71%. Additionally, signs of a recovering housing market are evident, with a noted 11% increase in housing starts in February, suggesting a potential boost in sales if mortgage rates continue to decline. Overall, the housing market appears to be stabilizing, leaning towards a more balanced state between buyers and sellers.