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"We expect a steady increase in the demand for purchase," added Khater.
However, homebuyers still have to deal with overheated real estate prices and an insufficient supply of homes for sale. House price increases are declining, but some markets remain out of reach for most beginning buyers. Mortgage applications for the purchase of a home increased last week as rates fell.
"What's happening in the coming spring months is what's most relevant to the industry and in our attempt to gauge consumer reaction to the lowering of mortgage costs "said Peter Boockvar, chief investment officer at Bleakley Advisory Group. "The data on weekly mortgage loans we saw yesterday indicate a possible green campaign start."
Lower mortgage rates certainly increase purchasing power, but the reasons for lower rates, namely a weaker economy, could hurt buyer confidence. This may be part of the decline in pending sales.
"This suggests a mixed sales trend for the spring, as buyer confidence, driven by more housing and lower mortgage rates, could be challenged by concerns about continued economic growth," he said. Danielle Hale, Chief Economist for Realtors. com.
An important report on the economy, the monthly employment report, is expected to be released by the end of next week. This could cause rates to vary significantly in both directions.
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