Despite mortgage rates climbing to five-week highs, sidelined homebuyers are returning to the market in a sudden surge, creating a lucrative plot twist for major homebuilders like D.R. Horton Inc. (NYSE:DHI) and Lennar Corp. (NYSE:LEN).
Buyers Accept The ‘New Normal’
The 30-year fixed-rate mortgage currently averages 6.37%, according to the latest Freddie Mac Primary Mortgage Market Survey, up from 6.30% last week. While the Mortgage Bankers Association (MBA), as reported a brief Wednesday spike to 6.46%, the overarching data reveal a market where buyers are finally tired of waiting.
Purchase mortgage applications jumped 4% over the past week and are currently tracking 7% higher year-over-year.
Industry leaders are observing a clear shift in consumer psychology. Potential homebuyers “shrugged off” the current economic and mortgage rate uncertainties and returned to the market, Joel Kan, an MBA economist, told CNBC.
National Association of Realtors chief economist Lawrence Yun confirmed the turning tide, noting agents are reporting a “surge in buyer demand in just the last few weeks.”
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