In January, sales of previously owned homes hit their highest level since 2007. Then, according to new numbers from the National Association of Realtors, February sales fell 7.1 percent. The drop was more than economists expected and a disappointment after a strong start to the year. Lawrence Yun, NAR’s chief economist, called it a step back. “Sales took a considerable step back in most of the country last month, and especially in the Northeast and Midwest,” Yun said. “The lull in contract signings in January from the large East Coast blizzard, along with the slump in the stock market, may have played a role in February’s lack of closings. However, the main issue continues to be a supply and affordability problem. Finding the right property at an affordable price is burdening many potential buyers.” A closer look at the data does reveal a regional difference in sales performance. For example, the Northeast saw a 17.1 percent drop in home sales, while the South only fell 1.8 percent. But, though winter weather may have played a significant role in hampering home sales, a lack of available homes to buy remains the issue to watch as buyers head into the spring and summer sales season. More here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell again last week. Rates dropped across all loan categories, including 30-year fixed-rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. Despite the lowest rates in months, however, demand for mortgages was down from the week before – mostly due to a 7 percent decline in the number of requests for applications to purchase homes. Michael Fratantoni, MBA’s chief economist, told CNBC blizzard conditions on the East Coast may be behind the decline in mortgage demand. “Mortgage rates fell below 4 percent in our survey for the first time since October 2015. The jumbo rate also decreased and was at its lowest level since April 2015,” Fratantoni said. “Despite the fall in rates, mortgage application activity was likely muted by the major East Coast snowstorm, although refinance activity increased very slightly.” Even though purchase application demand was down from the week before, it remains 17 percent higher than at the same time last year. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.