CHARLOTTE, N.C.–Bank of America is reporting it has seen an 80% increase in mortgage applications from January to March, far in excess of typical seasonal trends.
BofA spokesperson Ary Paglairizes said in a statement that lower long-term bond yields and rising housing inventory have encouraged buyers to return to the market.
“We’re seeing a steady increase in home buying activity, and it’s beyond what we would normally see from a seasonality perspective,” Matt Vernon, head of consumer lending at the bank, told the Mortgage Professionals Association.. “We’ve seen an 80% increase in our applications from January to now, and normally we would see around the 60% increase.”
In remarks to the news service, Vernon attributed the surge in applications to a drop in U.S. 10-year bond yields, which serve as a benchmark for mortgage rates. The yield fell to about 3.6% in September, the lowest since June 2023, which subsequently pushed the 30-year mortgage rate down to 6.1% in early October.
‘More Inventory’
Although mortgage rates have since risen to 6.7%, they remain below the 7% level seen a year earlier, according to data from LSEG based on the Mortgage Bankers Association’s average fixed 30-year contract rate, according to the MPA.
“We’re seeing more inventory come into the market, which ultimately leads to some stability and ultimately growth from a mortgage perspective,” Vernon told the MPA. “With rates remaining steady or slowly declining, we are seeing more demand from a buyer perspective than we saw in the previous years.”
The MPA noted in separate reporting that interest in mortgage refinancing also started to rise, but a significant portion of Bank of America’s mortgage customers – approximately 80% – currently hold loans with rates below 6%. This means mortgage rates would need to decline further to encourage more refinancing activity.
‘Aligns With Broader Trend’
The publication further noted that the rise in mortgage applications aligns with a broader trend in the housing market.
“U.S. existing home sales unexpectedly increased in February as greater housing supply lured more buyers,” the MPA said, pointing to a poll Reuters conducted in February suggested that housing affordability in the U.S. is expected to improve modestly over the next year, driven more by interest rate adjustments than an increase in available homes.
