How did mortgage refinance applications perform last week?

Homeowners come back to mortgage refis

Mortgage refinance applications hit a two-year high last week as users rushed back to the refi market. Refinance activity was up 16% from the previous week and accounted for a much higher percentage of total applications this week.

When looking at year-over-year data, refinance activity was 60% higher than the same time period last year.

Joel Kan, the Mortgage Bankers Association vice president and deputy chief economist, stated, “As a result of lower rates, refinance applications increased across all loan types, particularly for VA loans, and were almost 60 percent higher than it was at this time last year and were at its highest level in two years.”

Which cities have more inventory than before the pandemic?

According to recent data, housing inventory is much higher than the same time last year, but certain areas have seen dramatic increases in available homes. There are markets that have more inventory now than they did pre-pandemic.

Which market has seen the greatest increase? Texas accounts for the top two markets on the list. Austin, TX has seen the greatest increase in available home inventory with stock currently 35.5% higher than pre-pandemic levels. The San Antonio metro area has seen a 34.3% increase in available inventory.

Denver, CO, Tampa, FL, and New Orleans, LA rounded out the top five metros to see an increase in home inventory.

Are home prices starting to cool off?

Mortgage rates have cooled, but how about home prices. Believe it or not, price cuts on listed homes are at their highest rate in the past two years.

A recent article from Business Insider revealed that the share of home listings that saw a price cut rose to 18.9% in July 2024. That’s up 3.4% from July 2023.

Ralph McLaughlin, a senior economist at Realtor.com, credits higher rates with the reason for the recent cool off. McLaughlin stated, “First, rates remain higher than expected, which means there is less buyer activity. Second, the prospect of lower mortgage rates coming this fall may have induced some buyers to wait. This combo has led sellers to lower their prices in order to attract more buyers.”

Cities in the Sun Belt lead the way with 9.7% of available homes in Tampa, FL getting a price cut in July 2024. Charlotte also saw 9.4% of homes get a price cut last month.

McLaughlin went on to say, “These are places where sellers have had a good run over the past few years with rising prices, but with the effects of higher rates fully settling in, sellers are having to come back down to earth with their price expectations.”