The U.S. housing market may have reached bottom, according to new analysis from industry experts, citing the recent decline in mortgage rates as a primary driver.
Lawrence Yun, chief economist at the National Association of Realtors says that buyer demand is up with rates now at 4.5 percent, down 5 basis points since December 2018, "past historical relationship suggests around 200,000 additional home sales as a result over the course of the year." Yun says the demand will lift home values as well. A recent Wells Fargo note says, “sentiment on the housing market is currently too pessimistic," but references anecdotal reporting that buyer traffic "has revived a bit now," Yahoo Finance reports.
The number of people in the U.S. who applied for a loan to buy a home rose 13.5 percent for the week ending Jan. 11 from a week earlier, according to the Mortgage Bankers Association Wednesday. That was the highest level since February 2018. The MBA’s seasonally adjusted Purchase Index increased 9 percent from a week earlier — the highest level since April 2010. The activity is attributed to a decline in mortgage interest rates since mid-November. Freddie Mac said on Thursday the average rate on benchmark 30-year, fixed-rate mortgage remained steady at 4.45 percent.