Ideal number for homebuyers likely to begin with a five, says SVP
After a bruising month for the mortgage market in March, early signs are emerging that could point to a brighter outlook in the spring.
Applications tumbled last month as 30-year fixed rates soared above 6.5% amid continuing price pressures and economic turmoil caused by the war in Iran.
But rising hopes of a permanent truce to end that conflict have boosted the rate picture in April, with new Mortgage Bankers Association (MBA) data showing that rates fell for the third consecutive week in the seven days ending April 17 and total mortgage application volume jumped by 7.9%.
A 10% week-over-week increase in purchase applications means they now sit 14% higher than the same time last year, while refinance activity inched up 6% on the week and moved 52% higher year over year.
And lenders on the ground say the trend towards lower rates is already translating into busier pipelines. “Friday was our best day. We definitely had a really good run at it,” Fif Ghobadian, senior vice president and producing branch manager at OriginPoint in San Francisco, told Mortgage Professional America.
She said buyers and sellers who have been sitting on the sidelines are now beginning to re-engage in the market after a weeks-long rate shock. “As the rates come down, we’re in a position where more people are willing to buy and sell,” she said.
“There’s more trading happening, and with that there’ll be more competition in the market. As a result, we should have more inventory and maybe more people can buy and actually trade – whereas a lot of people right now are in the preapproval status and stuck because they can’t find a house.”
Home sales resilient amid wider economic jitters
Despite the uncertainty generated by the US-Iran war, pending home sales ticked slightly higher last month, defying expectations of a slump and signaling a resilient housing market.
The National Association of Realtors (NAR) said its Pending Home Sales Index increased by 1.5% month over month in March – and the association’s chief economist Lawrence Yun also sees higher housing supply as essential if the market is to gather pace.
“Contract signings rose in March despite higher mortgage rates, pointing to pent-up housing demand,” he said in a statement accompanying the release. “A greater supply of inventory will help translate that demand into more home sales.”
Ghobadian said the supply issue is a significant challenge for buyers in the Bay Area, her local market, partly because it’s a small area that generates plenty of interest among homebuyers.
“The Bay Area is not that big and the demand is greater than the supply, always,” she said. ‘Now, especially because of the rates not being as great, people are not selling if they don’t have to because a lot of people are still locked into their 2-3% rate.
“The market is seeing even lower inventory and big demand. With the tech boom here, there’s just a big influx of people moving to the Bay Area and not as many houses. It’s always been an issue, but it’s just become more of an issue now.”
Mortgage rates starting with a five likely to boost activity even further
For brokers and buyers, the question hovering over the current market is a familiar one: what’s the magic number that might unlock more activity and convince even more buyers that the time is right to make their move?
The headline rate remains near the mid-sixes, currently sitting at 6.35% according to the MBA data, although that’s significantly lower – by about 55 basis points – than it was at the same time in 2025.
Rates briefly dropped into the fives in January when President Trump ordered Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds, and Ghobadian said a similar drop could prove a gamechanger in the weeks ahead.
“The number ‘five’ anywhere on there – 5.99%, 5.8% – is kind of like this trigger,” she said. “We’re fairly close to it, but not close enough.”
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