BoA mortgage applications jump 80pc in Q1

NEW YORK, Mar 27 (Reuters): Bank of America saw an 80 per cent jump in mortgage applications between January and March, its executive of consumer lending said, as buyers were tempted by increasing home inventory and lower long-term bond yield.

"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 second-biggest US lender, told Reuters. "We've seen an 80 per cent increase in our applications from January to now, and normally we would see around the 60 per cent increase." The drop last fall in US 10-year bond yields, which is a benchmark for mortgage rates, encouraged more buyers to return to the market, he said.

The yield dipped to about 3.6 per cent in September, the lowest since June 2023, which pushed down the 30-year mortgage rate to 6.1 per cent in early October. The interest rate on a 30-year mortgage is currently at 6.7 per cent, still below the 7 per cent a year earlier, according to LSEG's data based on the Mortgage Bankers Association's average fixed 30-year contract rate.

"We're seeing more inventory come into the market, which ultimately leads to some stability and ultimately growth from a mortgage perspective," BofA's Vernon said.

"With rates remaining steady or slowly declining, we are seeing more demand from a buyer perspective than we saw in the previous years."

Interest in mortgage refinancing is also picking up, but about 80 per cent of the bank's mortgages currently have interest rates below 6 per cent.