What’s the reason for the recent decline in mortgage applications?

A: Part of the reason for the decline in mortgage applications is that those figures group in all applications together, for refinances and for purchases. So those numbers can be misleading. Of course mortgage rates have gone up, and so the number of refi applications has declined.

One of my best lenders, Stephanie Hartsell at Guaranteed Rate Affinity, indicated that for right now with purchase pre-approval applications, she is buried with homeowners getting ready to make offers on properties. It’s a bit counterintuitive, but when mortgage rates go up, it causes a greater sense of urgency for home buyers to get into a home before rates go up further.

In my real estate practice on the San Mateo Peninsula, I’m not seeing any signs at this point of a softening of demand for housing. Demand remains very strong while we continue to have a lack of supply of homes available for sale.

Home prices are still spiking with multiple offers being the norm and sale prices often landing $500,000 over asking price.

In fact, for the month of February in San Mateo County, according to data from MLS Listings Inc., the median home price for a single family dwelling at $2.1 million showed an increase of 10.5% over February of 2021 when it was at $1.9 million. Jeff LaMont, Coldwell Banker Realty, 650-740-8808, jeff@jefflamont.com.

A: We are all very aware that our current world situation is extremely volatile, which is reflected, to a certain extent, in our real estate markets. The “macro” affects the “micro.”

Mortgage applications have fallen recently, primarily in the refinance sector as the majority of homeowners seeking to refinance their existing home loans did so last year when rates were at an all-time low.

The demand for Purchase Money Mortgages remains strong, however, as buying a home remains a goal for many of those who can afford it, and interest rates are still historically low.

Would-be buyers realize that buying a house, and having a mortgage with a fixed interest rate, provides stability in their lives. Not only can they control their housing situation, but their monthly payments will not increase over the life of the loan.

Any drop in the volume of Purchase Money Mortgage applications can be attributed to the fact that inventory is even more limited so far this year than we have seen in the past couple of years, translating into fewer buyers needing financing. Karen Starr, the Grubb Co., 510-414-6000, starr@grubbco.com; Brenda Schaefer, the Grubb Co., 510-453-2401, bschaefer@grubbco.com.

A: When mortgage rates drop, people are incentivized to refinance existing mortgages for lower rates and buyers are incentivized to borrow to purchase because access to cash is cheap.

Primary property is often the single most expensive thing a person or a family will purchase, and also the longest financial commitment.

To commit to such a purchase, buyers must believe that their financial future will be stable for the following years to come and that they are making a sound and confident financial decision.

First-time buyers are often referred to as “heroes” in our office, as very rarely is purchasing one’s first home a comfortable scenario. It is a drastic lifestyle change and a milestone in their lives.

In a world where uncertainty is the normal — a roller coaster of a stock market, potential war, talks of multiple bubbles, doubledigit appreciation of Bay Area housing, and seemingly uncapped inflation — buyers lack the confidence to purchase, and they are unsure about the future, and thus we get a drop in mortgage applications Wallace Chane, Metis Real Estate, 650-924-2631, wallace@metisre.com.