Low rates push demand for new homes
Posted May 23, 2012
According to the mortgage bankers this week, applications for mortgages were up 3.8 percent for the week ending May 18. Historically low interest rates helped push that number.
The overall refinance percentage has risen again, now accounting for 76.6 percent of all mortgage transactions, which is up from 74.9 percent the prior week. Purchases dropped for the second week in a row, declining 3 percent for the week.
New home sales for April came in up 3.3 percent for the month, exceeding analysts’ expectations and continuing the established trend from Wednesday with existing home sales.
Here in the Triangle, we’re seeing solid new home sales in 2012, so much so that if high new home purchase demand continues, we’re actually in a position of having a Triangle new home shortage within many developments in the near future. Prime lots which hadn’t yet been sold are selling at a premium here in the Triangle, and builders are searching desperately for quality land to develop and build out.
After a brief run-up yesterday in the 10-year to a yield of 1.80, it's yield plummeted to 1.71 Wednesday, getting very close to setting a new all-time low! This reversal in yield is being caused by the continued debate and uncertainty about Greece and its potential exit strategy from the EU. Mortgage rates are enjoying an amazing ride as well.