Two interesting developments were reported this week and both involved mortgage rates.
Mortgage rates fell this week, according to Mortgage News Daily. The average rate on the 30-year fixed mortgage fell 21 basis points in the past week, from 4.94% to 4.73%. This shows a reversal from trends posted back in November when mortgage rates hit an eight-year high of 5.05%.
Just as stocks were falling, real estate may again show some bounce-back.
The drop in the rates could translate into a $70 per-month savings for home buyers on a $300,000 loan and translating into a yearly savings of $900 a year.
Many buyers are anticipating rates will only go higher in 2019, which brings me to the second story.
It was reported by The Mortgage Bankers Association that total mortgage applications rose by 2% over the course of the last week. Even though the number of applications is significantly lower than it was in 2017 by 19%, the uptick during the month of December shows that people still have an appetite to own their own home.
Overall mortgage interest rates remains 89 basis points higher than it was a year ago while home prices are also higher than they were in 2017. Affordability, inventory shortages, and slow housing starts are all contributing to a tighter housing market.