BREAKING: Bank Of America Mortgage Applications Jumped 80% In Q1
Bank of America saw an 80% jump in mortgage applications between January and March, its executive of consumer lending said, as buyers were tempted by increasing home inventory and lower long-term bond yield.
“We’re seeing a steady increase in home buying activity, and it’s beyond what we would normally see from a seasonality perspective.”
Head of consumer lending at the second-biggest U.S. lender, Matt Vernon, told Reuters. “We’ve seen an 80% increase in our applications from January to now, and normally we would see around the 60% increase.”
The drop last fall in U.S. 10-year bond yields, which is a benchmark for mortgage rates, encouraged more buyers to return to the market, he said.
A Reuters analysis of the report said the yield dipped to about 3.6% in September, the lowest since June 2023, which pushed down the 30-year mortgage rate to 6.1% in early October.
The interest rate on a 30-year mortgage is currently at 6.7%, still below the 7% a year earlier, according to LSEG’s data based on the Mortgage Bankers Association’s average fixed 30-year contract rate.
“We’re seeing more inventory come into the market, which ultimately leads to some stability and ultimately growth from a mortgage perspective,” BofA’s Vernon said.
“With rates remaining steady or slowly declining, we are seeing more demand from a buyer perspective than we saw in the previous years.”
Interest in mortgage refinancing is also picking up, but about 80% of the bank’s mortgages currently have interest rates below 6%, so mortgage rates would have to slide further below that to spur more demand.
“Below 6% we would see very meaningful pickup from a rate perspective,” he said.
U.S. existing home sales unexpectedly increased in February as rising supply pulled buyers back into the market.
A Reuters poll of property experts in February showed that affordability in the U.S. housing market will improve modestly in the coming year, based on expectations for a few more interest rate cuts, not an increase in homes available to purchase.
