April showers bring May flowers – and also an uptick in May home sales.
Spring is a wonderful time of the year for real estate, and it looks like the month of May is showing great promise.
The purchase index from the Mortgage Bankers Association increased 5% during the first week of May compared to the last week in April, and was 5% higher than the same week one year ago. This shows that mortgage applications are on the rise – but will these turn into sales?
Mortgage rates have seen the biggest decline in more than 10 years – a 30-year fixed mortgage seeing 4.06% on average. But as of Tuesday, Bankrate noted that the same loan has fallen to 3.99%, which is a decrease of 6 basis points over the last week.
The pairing of extremely low mortgage rates with a high volume of mortgage applications should equal out to a booming spring season for the real estate market. Let’s not forget the wage growth that seems to be happening in much of the country – which should help incentivize first-time homebuyers to jump into the market.
Lawrence Yun, Chief Economist of the National Association of Realtors, commented on where the spring market could go: “there is a pent-up demand in the market, and we should see a better performing market in the coming quarters and years.”
To track the spring fever in the real estate world, track the mortgage applications index that the MBA issues every Wednesday.