As rates rise, mortgage application activity has tailed off. Refinance applications have dropped by over 50% over the past two months, according to MarketWatch, who cites a Mortgage Bankers Association report.
Applications to purchase a home have also dropped, but by a much smaller 9%.
We will see how the housing market continues to adjust to higher rates in the coming months, but early returns suggests that progress continues.
Through 251 single-family residential home sales in June, the San Luis Obispo County median home sales price rose 2.75% from May to $458,000. Year-over-year, the median sales price has jumped 15.9%. All data according to Keith Byrd’s real estate dashboards.
Foreclosure activity has continued to significantly drop in 2013. According to RealtyTrac, in June 2013, pre-foreclosures were down 11.8% from May, and auctions (-15.6%) and bank repossessions (-16.7%) also fell. Year-over-year, the data is even more stark: pre-foreclosures (-69.8%), auctions (-73.0%), and bank repossessions (-77.3%) are all much lower.
Across the nation, foreclosures are down 27% over the past year.
Perhaps the best news for the housing market, though, comes courtesy of a Forbes study. It is still much more financially advantageous to buy a house rather than rent. Forbes estimates that it would take a 10.5% mortgage rate for renting to be more affordable.
The rental market exploded in the wake of the housing bubble. For people looking to buy, the combination of low rates (historically) and discounted home prices (2003 level) makes housing a cheaper investment.
Even with 5% mortgage rates, Forbes estimates that buying is 34% cheaper than renting. Read the full report HERE.
As for mortgage rates this week, we saw little change. Rates are slightly lower across the board. Track rate movement for 10 loan programs HERE.