Robert Besser
01 Apr 2025

NEW YORK CITY, New York: A drop in mortgage rates and more housing inventory helped drive a surge in mortgage activity at Bank of America in early 2024, signaling growing confidence among U.S. homebuyers.

"We are seeing a steady increase in home buying activity, and it is beyond what we would normally see from a seasonality perspective," said Matt Vernon, head of consumer lending at Bank of America. "We have seen an 80 percent increase in our applications from January to now, and normally we would see around a 60 percent increase."

The rally follows a dip in the U.S. 10-year Treasury yield last fall, which pushed mortgage rates lower and brought more buyers back into the market. The 30-year mortgage rate dropped to 6.1 percent in early October after the 10-year yield fell to about 3.6 percent in September—the lowest since June 2023. As of now, mortgage rates are around 6.7 percent, still below the seven percent seen a year earlier, according to data from LSEG.

"We are seeing more inventory come into the market, which ultimately leads to some stability and ultimately growth from a mortgage perspective," 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."

Refinancing demand has also increased, although 80 percent of BofA mortgage holders still have rates under six percent, making further declines necessary to trigger significant activity. "Below six percent we would see a very meaningful pickup from a rate perspective," Vernon added.

Mortgage lender UWM Holdings also expects higher demand this year. "People are feeling, in general, good about the economy," said UWM's Chief Strategy Officer Alex Elezaj. "Rates could go up, they could go down, but it's still a good time for me to explore what my options are."

UWM projects US$28 billion to $35 billion in first-quarter originations, up from $27.6 billion a year ago. To manage its growth, the company expanded its workforce from 6,700 employees in 2023 to 9,100 by the end of 2024.

"We are operationally prepared across the board to handle pretty much double the volume," Elezaj said.

Photo credit: Big News Network news agency.