Home borrowing costs fell in the latest week and remain at historically low levels. The MBA reports that the 30-year fixed-rate mortgage declined seven basis points to 3.20% with 0.36 in points for the week ended April 16, 2021. The Market Composite Index, a measure of total mortgage loan application volume, rose 8.6% while the Purchase Index increased by 5.7%. The Refinance Index fell 10.4% and is down 23% from a year ago. Spokesperson Joel Kan said, "Mortgage rates dropped to their lowest levels in around two months, prompting a small resurgence in refinance activity after six weeks of declines."
The housing market continues to be a beacon of light for the U.S. economy across many of the five priced sectors. The luxury market is flourishing as potential borrowers are looking for more space and big backyards. Affluent buyers with easy access to work from anywhere are benefitting from low rates and purchasing high-end homes, particularly in vacation destinations. Redfin reports that luxury-home sales rose 42% year over year in Q1 2021, well above the 7% gain seen in affordable-home sales. Also, the supply problem is not as bad in the luxury market due to the number of high-end homeowners putting their properties up for sale. New listings of luxury homes rose nearly 16% annually in Q1 with listings dropped in most other price tiers. Redfin's five pricing tiers are luxury, expensive, mid-priced, affordable and most affordable.