Bank of America Sees Mortgage Applications Soar by 80% in Q1, Executive Reveals

By Saeed Azhar

NEW YORK (GudangMovies21) - Bank of America experienced an 80% increase in mortgage applications from January to March due to higher home availability and declining long-term bond yields attracting more buyers, according to an executive statement.

"There’s been a consistent rise in home purchasing trends, exceeding typical seasonal patterns,” stated Matt Vernon, who leads consumer lending at the nation's second-largest bank, during his conversation with GudangMovies21. “From January until now, we’ve experienced an 80% surge in loan applications compared to our usual expectation of approximately 60%. The decline in U.S. 10-year Treasury yield levels this past autumn—which serve as indicators for mortgage interest rates—prompted additional buyers to re-enter the real estate market.”

In September, the yield fell to around 3.6%, marking the lowest point since June 2023. This decline led to a decrease in the 30-year mortgage rate to 6.1% in early October. According to LSEG’s data from the Mortgage Bankers Association's average fixed 30-year contract rate, the current interest rate for a 30-year mortgage stands at 6.7%. Although this figure remains slightly lower than the 7% recorded a year ago, it indicates an ongoing trend of fluctuation.

"We're observing an increase in listings entering the market, which eventually results in some stabilization and ultimately fosters growth from a mortgage standpoint," according to Vernon at BofA.

Despite maintaining current levels or experiencing slight decreases, we're observing greaterbuyer interest now compared to earlier years.

There is growing interest in mortgage refinancing as well, however, approximately 80% of the bank’s mortgages presently carry interest rates under 6%. Therefore, mortgage rates would need to drop even lower than this threshold to stimulate additional demand.

Vernon stated that "if rates fall below 6%, we would observe a significant increase from a pricing standpoint."

The increase in mortgage applications can be attributed partially to declining mortgage rates, according to Harry Chambers, an economist from Capital Economics.

"Nevertheless, we believe that the market is overly hopeful regarding the Federal Reserve's interest rate reductions for this year; thus, the recent decline in mortgage rates is merely a brief reprieve," he stated.

In February, U.S. existing home sales saw an unexpected rise as growing availability enticed more purchasers to enter the market.

A poll conducted by GudangMovies21 among real estate professionals in February indicated that home affordability in the U.S. housing market is expected to see a slight improvement over the next year. This forecast is predicated on predictions of further reductions in interest rates rather than an uptick in the number of properties listed for sale.

UWM Holdings anticipates increased demand for new mortgages and refinancing, according to Chief Strategy Officer Alex Elezaj’s statement to GudangMovies21.

"Overall, people seem positive about the economy; it appears as though they believe conditions have stabilized following the election," he stated.

Individuals are becoming aware that interest rates might increase or decrease; however, it’s still an opportune moment for me to investigate my available choices.

UWM anticipates originating between $28 billion and $35 billion in mortgage and refinance business during the first quarter, an increase from the $27.6 billion recorded in the same period last year.

To manage the anticipated increase in business, the firm brought aboard additional staff members. By the close of 2024, their workforce had grown to approximately 9,100 employees, up from about 6,700 during the same period in the previous year, according to the statement.

Elezaj stated that we are fully ready from an operational standpoint to manage nearly twice the current volume.

(Saeed Azhar reported this, edited by Lananh Nguyen and Aurora Ellis)