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The fall home-selling season is set to begin next week, and two leading indicators suggest that buyer demand is on the upswing despite wobbly consumer confidence figures.
Nationwide, mortgage application volume increased 22.1 percent on a year-to-year basis, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Aug. 22. The MBA’s Market Composite Index, a measure of overall mortgage loan application volume, increased by 22 percent. The group’s unadjusted Purchase Index decreased 0.1 percent compared to the previous week but was 25 percent higher than the same week one year ago.
“Mortgage rates inched higher for the second straight week, with the 30-year fixed-rate up to 6.69 percent. While this was not a significant increase, it was enough to cause a pullback in refinance applications,” MBA’s Vice President and Deputy Chief Economist said. “Purchase applications had their strongest week in over a month, up 2 percent, and the average loan size increased to its highest level in two months at $433,400. Prospective buyers appear to be less sensitive to rates at these levels and are more active, bolstered by more inventory and cooling home-price growth in many parts of the country.”
The local picture suggests growing buyer demand, as well, with consumers and businesses, alike, anticipating one or more cuts to the Federal Reserve’s benchmark short-term interest rate, which could in turn help lower mortgage rates.
According to mortgage data firm Optimal Blue’s most recent report, the dollar volume of mortgage rate-locks applied for in Greater Boston in July was up 7.5 percent month-over-month. The average loan amount was $630,320, and 86 percent of rate-lock volumes covered purchase loans.
That compares to July 2024, when Optimal Blue reported Boston-area rate-lock volume was down 3.9 percent month-over-month, with an average loan amount of $566,149. In July 2024, 87 percent of rate-lock volumes covered purchase loans.
Rate locks are a leading indicator of mortgage applications. They are a agreement between a prospective homebuyer and their mortgage lender to secure a specific interest rate for a loan, and usually last 30, 45 or 60 days.
Buyers also may be coming to market lured by the promise more listings. Much of the increase in condo listings is concentrated in Greater Boston, while the jumps in single-family listings are located in Worcester and Barnstable counties.
