Key Highlights
- Home purchase mortgage applications dropped -15% for week
- A -29.4% decline in total mortgage volume was the lowest since August 2019
- Average contract interest rate for 30-year fixed with conforming loan balanced up to 3.82% from last week’s 3.74%
The massive economic shutdown and slight increase in mortgage interest rates caused both current and potential homeowners to stay away from the mortgage market. According to the Mortgage Bankers Association (MBA), mortgage application volume fell 29.4$ from last week to this week.
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The average contract interest rate for 30-year fixed mortgages with conforming loan balances of $510,400 or less hit 3.82% from 3.74% the week prior, the highest level since mid-January 2020.
Refinance applications fell a huge -34% for the week but, even still, were +195% higher than one year ago when rates were 63 basis points higher.
Purchase application fell -15% for the week to the lowest level since August 2019. Purchase applications were also -11% lower annually.
MBA’s associate vice president of economic and industry forecasting, Joel Kan said, “Potential homebuyers might continue to hold off on buying until there is a slowdown in the spread of the coronavirus and more clarity on the economic outlook.”
Despite the Federal Reserve buying mortgage-backed securities to instill market liquidity and therefore lowering interest rates, many industry experts are reporting a large drop in buyer demand and are predicting a huge drop in home sales over the next few months.
Thanks to CNBC’s Diana Olick.
Also read: Breaking News: Fed LOWERS Interest rates! | Fears of Housing Market Crash Loom, Why For-Sale Inventory Is Running Out, Podcast: Breaking News, SHORT SALES Expected To Spike | Real Estate Crash News
