(Hollywood, FL) — For sure, the housing and lending markets have had a rocky road in 2022. The highest inflation rate in 40 years, rising interest rates, skyrocketing home prices, and a persistent housing shortage have all contributed to a downturn in the housing and mortgage sectors.
But within the last few weeks, there have been some positive indicators that suggest we may be finally turning the corner. Of course, it’s early and we will need to see more evidence to know for sure where things stand, but there may be reasons to be cautiously optimistic that market pressures are easing. There may be some welcome light at the end of our tunnel.
What we can infer from this is that the housing market is beginning to cool off. As housing inventory increases, home prices will begin to come down, bringing more buyers into the market. We are already witnessing this effect in certain parts of the country.
All of these factors are contributing to a slight increase in mortgage demand. According to the Mortgage Bankers Association (MBA), mortgage applications rose slightly for the second week in a row. MBA’s Market Composite Index for the week ended August 5 increased 0.2 percent on a seasonally adjusted basis.
Surprisingly, much of this increase was attributed to an increase in refinancing. TheRefinance Index was up 3.5% from the previous week, itslargest gain since early June. Refinance applications constituted 32.0% of the total received during the week.
Of course, we are not out of the woods yet and given the massive economic disruptions that the pandemic induced, it might be a while before normalcy is fully restored. But I do believe there are encouraging signs that the worst might be behind us and brighter days lie ahead.