Rates, home purchases continue climb
Posted March 14, 2012 4:44 p.m. EDT
Updated March 14, 2012 4:47 p.m. EDT
Home sales continued their upward momentum, according to data out Wednesday from Realtor.com.
The number of closed home sales jumped 27 percent from February of 2011, but that benefit comes at a cost. Homes are spending more days on the market (134 on average) and selling at about 3 percent less than a year ago.
The mortgage rate market was hammered Wednesday, with mortgage rates on a steep incline thanks to improved confidence and rising treasury yields.
The 10-year yield has now topped 2.28 which is a five-month high, and mortgage rates are at a four-month high. I wonder if we’ll see economic data strong enough to continue this torrid pace of activity. For now, it looks as though the Treasury Yield ceiling that had been in place for weeks has been shattered.
The MBA’s Mortgage Application Index dropped again this week, losing another 2.4 percent for the week ending March 9. Refinances led the way again on the decline, and the overall refinance percentage has now dipped to 75 percent of all transactions. Purchases, however, for the third week in a row increased by 4.4 percent. Given this jump in rates, it’s likely that we’ll see the application index take a huge dive next week.