Lisa Mailhot | November 21, 2023
Buyers
Are you thinking about buying or selling a home? The latest data from the Federal Reserve Bank of New York suggests that now might be the perfect time to make your move. Mortgage rejection rates are down year-over-year, and this is great news for both buyers and sellers in the real estate market.
One of the key reasons behind the decline in rejection rates is the higher creditworthiness among consumers applying for new mortgages in 2023. This means that a smaller group of mortgage applicants is meeting the criteria for approval, which is excellent news if you're looking to secure a mortgage for your dream home.
Not only are rejection rates down, but application rates have also seen notable changes over the past year. The average application rate for 2023 is 41.2%, which is lower than both the 2022 level of 44.8% and the pre-pandemic 2019 level of 45.8%. This suggests that while there are fewer applications, those who do apply have a better chance of success.
Mortgage loan application rates have also experienced a significant shift. In October, they declined to 4.3% from 6.7% compared to one year earlier. The 2023 average rate of 5.7% is 1.5 percentage points lower than in 2022 and 2.2 percentage points below the 2019 average. This trend indicates a more favorable environment for potential homebuyers.
If you're a homeowner considering refinancing, there's good news for you as well. Application rates for mortgage refinancing declined further during 2023, reaching 3.3% in October from 8.9% in the previous year. While these levels are below pre-pandemic levels, they still represent an attractive opportunity for those looking to refinance their mortgages.
The New York Fed's analysis also provides insights into future trends. The average likelihood of applying for a mortgage in the next 12 months decreased slightly to 6.7% from 7.3% in 2022. Meanwhile, the average likelihood of applying for a mortgage refinance reached a new low of 3.5% in October. These numbers suggest that the coming months may still offer favorable conditions for prospective homebuyers and refinancers.
The declining mortgage rejection rates indicate a more favorable real estate landscape. Whether you're a buyer looking to secure a mortgage or a homeowner considering refinancing, these trends could work in your favor. Stay tuned to our blog for more insights into the ever-evolving real estate market.
Reference: NY FED: MORTGAGE REJECTION RATES DOWN YEAR-OVER-YEAR
Mortgage loan applications surged 11% in late April/early May, largely driven by experienced buyers trading up to larger homes as mortgage rates briefly declined. With… Read more
Childcare costs are skyrocketing across the U.S., surpassing rent in most major metros. In cities like Denver and Seattle, families with two kids are paying over 160% … Read more
California home sales have dropped below Great Recession levels, while inventory has surged more than 50% in the past year. As buyers retreat due to affordability issu… Read more
Multifamily building permits have plunged over 27% from their pandemic peak, signaling a major slowdown in new apartment construction. Learn how interest rates, tariff… Read more
Despite a turbulent start to the spring buying season, market experts see reasons for optimism—especially in the new-home sector. With mortgage rates fluctuating, tari… Read more
The 2025 spring housing market is seeing stalled momentum, with homebuyers backing off amid economic uncertainty and soaring mortgage payments. With home prices and in… Read more
In today's shifting housing market, sellers are asking nearly $39,000 more than buyers are willing to pay—the widest gap since 2020. Learn what’s driving the divide be… Read more
Home prices in the U.S. continue to climb, but the pace is slowing. February’s 3.9% annual increase signals a shift toward more sustainable growth, according to the FH… Read more
Divorce listings come with unique emotional and logistical challenges. Discover how the right real estate professional can help divorcing couples transition smoothly, … Read more
Let's find a time that suits you best to chat about your goals, show you how we work, and figure out how we can help you the most