Mortgage Applications (Nov.)

A rise in mortgage rates to an eight-month high of 3.31% by the end of November failed to dampen home purchase demand, which surged to a nine-month high. The drop in 10-year Treasury yields from the arrival of the Omicron variant implies mortgage rates will fall back over the next couple of weeks, which may provide some further support to demand. But with affordability stretched we doubt the current level of home purchase applications can be sustained beyond the next few weeks.
Matthew Pointon Senior Property Economist
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US Housing Market Data Response

New Home Sales (Dec.)

New home sales had a strong end to the year, as the record low number of existing homes on the market drove the sale of homes which were still under construction. That lack of existing supply will continue to support new home sales even as overall demand cools on the back of rising mortgage interest rates. From 811,000 annualised at the end of 2021, we expect a rise in sales to around 840,000 by end-2022.

26 January 2022

US Housing Market Data Response

Case-Shiller/FHFA House Prices (Nov.)

Case-Shiller reported annual house price growth falling for the third consecutive month in November. And with rising mortgage rates set to stretch affordability to its worst since 2008, we expect annual house price growth to slow from 19% to around 3% by end-2022.

25 January 2022

US Housing Market Data Response

Existing Home Sales (Dec.)

Despite a 6% m/m fall in existing home sales in December, 2021 marked an impressive year for existing home sales, with sales 11% higher compared to 2020. But looking ahead, a backdrop of rising mortgage rates and a record-low inventory means that sales will drop back and average around 5.88m annualised this year, less than most other forecasters expect.

20 January 2022

More from Matthew Pointon

US Housing Market Data Response

Case-Shiller/FHFA House Prices (Sep.)

Annual house price growth fell for the first time in 16-months in September, and stretched affordability means it should continue to slow. It is too soon to say what impact the arrival of the Omicron variant will have on the housing market. But one immediate effect has been a fall in interest rates, which if sustained may give prices some support over the remainder of the year.

30 November 2021

US Housing Market Update

Why are pending and existing home sales diverging?

An increase in the quality of mortgage borrowers, and record low inventory, are boosting the mortgage closing rate and leading to an increase in the share of pending home sales converted into existing home sales. Those factors are not set to go into reverse anytime soon, so we don’t think existing sales will snap back to match the pending sales index over the next few months.

29 November 2021

US Housing Market Data Response

New Home Sales (Oct.)

The marginal improvement in new home sales in October was flattered by a downward revision to September’s data, and the bigger picture is that sales have been fairly steady since May. Looking ahead housing demand will ease as mortgage rates rise but, with new home inventory set to remain much healthier compared to existing homes, new sales will see a steady rise to 880,000 annualised by end-2022.

24 November 2021
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