"The supply limitation appears to be the main factor holding back contract signings in the past month"
- NAR chief economist Lawrence Yun
The number of applications for U.S. home mortgages rose significantly last week, as interest rates climbed, while refinancing demand accounted for a slightly smaller proportion of total activity, the Mortgage Bankers Association said Wednesday. A gauge of mortgage application activity, which includes both refinancing and home purchase demand, surged 3.4% in the week ended February 1. At the same time, fixed 30-year mortgage rates averaged 3.73% during the week, 6 basis points higher compared to 3.67% the week before. The report also showed that rates have increased for seven of the last eight weeks.
"Our expectation is that the U.S. housing market will deliver more of the same in 2013 -- increased start activity, modest home price appreciation, and continued cleansing of the stock of shadow inventory," Michael Gapen, a New York-based senior economist at Barclays Plc, said in a research note before the report.
"The supply limitation appears to be the main factor holding back contract signings in the past month," said NAR chief economist Lawrence Yun. "Supplies of homes costing less than $100,000 are tight in much of the country, so first-time buyers have fewer options."
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