Homebuyer Activity Shows Signs of Warming Up for Spring

The spring season is warming up in housing as more and more buyers enter the market. And after rising mortgage rates sidelined so many buyers last year, that's a good sign for sellers. Realtor.Com has the latest:  "Spring is officially here, and like green shoots emerging from the bleak winter, new data suggests that more buyers are back in the market, although more subdued than a year ago."

We know buyer activity is trending up because of mortgage purchase application data. According to Investopedia:  "A mortgage application is a document submitted to a lender when you apply for a mortgage to purchase real estate."

That means the number of mortgage applications shows how many buyers are applying. Put another way, an increase in mortgage applications implies an increase in buyer demand – and as Joel Kan, VP and deputy chief economist at the Mortgage Bankers Association (MBA), explains, application activity started ramping up as mortgage rates fell steadily in March:  "Application activity increased as mortgage rates declined . . .So. recent increases, along with data from other sources showing an uptick in home sales, is a welcome development."

We can see how mortgage rates directly impact applications over time. As rates rose dramatically last year, applications fell in response (see graph below):

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