Home price gains in February registered 7 percent annually, a wider increase than January, according to CoreLogic. Prices are being helped by an improving job market and rising incomes, but fierce competition for the available listings is fueling the big gains.
"Home prices continue to grow at a torrid pace so far in 2017, and these gains are likely to continue well into the future," said Frank Martell, president and CEO of CoreLogic. "Home prices are at peak levels in many major markets."
Mortgage rates are higher than they were before the election, but they really haven't moved much in the past few weeks. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $424,100 or less increased to 4.34 percent from 4.33 percent, with points decreasing to 0.31 from 0.43, including the origination fee, for 80 percent loan-to-value ratio loans.
"Markets appeared to hit pause last week, with little new information emerging about upcoming administrative or legislative policy changes," said Lynn Fisher, the MBA's vice president of research and economics, who also noted that the average purchase loan size reached a new high for the survey. It has not, however, been increasing as quickly as home prices overall during the last year. The size of the average loan likely has less to do with rising home values and more with the fact that the bulk of sales are taking place on the higher end of the market, where supply is more plentiful.
Mortgage rates have not moved much so far this week, but that could change soon. The Federal Reserve on Wednesday releases the minutes of its most recent meeting, giving insight into its interest rate strategy, and the March employment report is being released on Friday.
"Although the minutes are merely a more detailed account of the Fed meeting from mid-March, they can nonetheless cause significant volatility for rates," said Matthew Graham chief operating officer of Mortgage News Daily.