Applications for new home purchases increased from March to a total of five percent (an increase of 3,000 applications) in April, according to the Mortgage Bankers Association.
Mortgage rates are on the decline, but not for long
Mortgage rates have seen a significant dip within the last month, and are currently at a six-month low. Now, mortgage rates are at their lowest since November of 2013. The drop in home loan rates, coupled with a record low unemployment rate of 6.3 percent nationwide, is most likely the cause of an increase in home loan applications.
Nationwide, a 30-year fixed-rate mortgage fell to an average of 4.21 percent, according to Freddie Mac. It is also noted that by paying one discount point (which is a fee that can be paid to lower the interest rate on a home loan) a home buyer or someone looking to refinance can get a mortgage rate in the three to four percent range.
(Note that mortgage rates are not expected to drop any lower past May, according to The Mortgage Reports.)
Inventory and the average price of homes are on the rise
The National Association of Realtors reported a total of 1.99 million homes for sale at the end of the first quarter this year, an increase of 3.1 percent from 2013. Housing sales in general have fallen to 4.60 million as of the first quarter of 2014; home sales were at 4.93 million during the first quarter of 2013. Severe weather conditions in the Northeast and Midwest impacted the sales of homes this past winter.
The average home in the United States sold for 8.6 percent more this year than in 2013. In the first quarter of this year a single-family home sold for a median price of $191,600, up from $176,400 from the first quarter of 2013.
Distressed home sales are also down from last year, showing signs that more homeowners are able to afford their monthly payments on time. Foreclosures and short sales only accounted for 15 percent of sales in the first quarter of the year, compared to 23 percent in the first quarter of last year.
If you have been thinking about buying a home, or refinancing your current loan, now is the perfect time. Taking advantage of the rates being offered can help you lock in a low rate to save money throughout the life of your home loan.