{"id":740810,"date":"2023-03-16T15:08:08","date_gmt":"2023-03-16T19:08:08","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/redfin-reports-demand-for-mortgages-ticks-up-as-rates-drop-amid-banking-turmoil\/"},"modified":"2023-03-16T15:08:08","modified_gmt":"2023-03-16T19:08:08","slug":"redfin-reports-demand-for-mortgages-ticks-up-as-rates-drop-amid-banking-turmoil","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/redfin-reports-demand-for-mortgages-ticks-up-as-rates-drop-amid-banking-turmoil\/","title":{"rendered":"Redfin Reports Demand For Mortgages Ticks Up As Rates Drop Amid Banking Turmoil"},"content":{"rendered":"

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Redfin Reports Demand For Mortgages Ticks Up As Rates Drop Amid Banking Turmoil<\/b><\/p>\n

Whether more buyers return to the market depends largely on how the Fed reacts to unrest in the banking industry alongside persistent inflation<\/i><\/p>\n

SEATTLE–(BUSINESS WIRE<\/a>)–
\n(NASDAQ: RDFN) \u2014 Some homebuyers are returning to the market as mortgage rates decline from the four-month high they reached last week, according to a new report<\/a> from Redfin (redfin.com<\/a>), the technology-powered real estate brokerage.\n<\/p>\n

\nDaily average mortgage rates dropped from 7% to about 6.5% over the weekend in the wake of Silicon Valley Bank\u2019s collapse. U.S. home prices also fell, dropping 1.8% year over year during the four weeks ending March 12, the biggest decline in over a decade.\n<\/p>\n

\nSidelined buyers reacted quickly: Bay Equity, Redfin\u2019s mortgage-lending company, locked a rate on more loans on March 10 than any other day so far this year. Overall, U.S. mortgage-purchase applications increased 7% from the week before during the week ending March 10.\n<\/p>\n

\nBut overall homebuying demand remains tepid, especially compared with the same period last year. That\u2019s largely because housing payments are still near historic highs: The typical homebuyer\u2019s monthly mortgage payment is $2,556, down marginally from last week\u2019s record high but up 24% from a year ago. Pending home sales are down 17% year over year, the biggest decline in six weeks. Demand is also limited by low supply; new listings of homes for sale posted their biggest annual drop in nearly three months.\n<\/p>\n

\n\u201cBuyers pounced when rates fell because they\u2019re so volatile right now, which shows that there are plenty of people waiting in the wings for the right time to enter the market. Where mortgage rates go from here largely depends on how the Fed reacts to chaos in the banking industry in the U.S. and abroad, alongside stubbornly high inflation,\u201d said Redfin Economics Research Lead Chen Zhao. \u201cThe Fed\u2019s goal at its meeting next week is to achieve a balancing act: Fight inflation while keeping the banking system intact. Even though the European Central Bank hiked interest rates more than expected this morning, it\u2019s unlikely the Fed will follow suit. Instead, we expect them to either raise rates modestly or press pause for the time being, the latter of which would send mortgage rates down and bring back many sidelined buyers and sellers.\u201d\n<\/p>\n

\nWhile the unrest in the banking system may lower rates and bring back some buyers in most of the country, it\u2019s likely to further spook buyers in certain areas. Housing markets in the Bay Area and New York, home to the three regional banks that have tumbled over the last week\u2014along with many tech workers who have either been laid off or are worried about being laid off\u2014are already feeling the pain.\n<\/p>\n

\n\u201cSome buyers are canceling their contracts or bowing out of their home search because they work in tech and they\u2019re worried about losing their jobs,\u201d said Bay Area Redfin manager Shelley Rocha. \u201cThe surge in tech layoffs was already causing jitters, and now the bank failures are adding to buyers\u2019 nerves.\u201d\n<\/p>\n

Leading indicators of homebuying activity:<\/b><\/p>\n