Key Highlights
- Purchase applications gained for sixth straight week
- Application level +6.7% higher than one year ago
- According to Mortgage Bankers Association, purchase applications jumped +9% last week
For the first time in weeks, no months, purchase applications are the news in the mortgage world, not refinance applications. According to the Mortgage Bankers Association (MBA), purchase applications rose +9% last week to a level +6.7% higher than one year ago at this time. Refinance applications fell -0.2% from the week prior although the refi level was +176% higher than one year ago.
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Great news, right? Purchase applications were up a substantial +54% from early April when most places in the country were under solid COVID lockdown.
Joel Kan, MBA’s associate vice president of economic and industry forecasting, said, “The housing market is continuing its path to recovery as various states reopen, leading to more buyers resuming their home search.”
Driven by purchase applications, the overall mortgage index was +2.7% higher than the previous week. The two drivers for purchase applications are first, mortgage rates being near the lowest levers ever on record at 3.24% for a 30-year fixed mortgage, according to Freddie Mac, and second, the shortage of for-sale homes on the market. The National Association of REALTORS® (NAR) via its chief economist, Lawrence Yun, indicated that the 1.47M for-sale properties at the end of April was the lowest supply of homes ever recorded for that month.
Mortgage applications backed by the Federal Housing Administration dropped to 11.2% fro the week’s prior of 11.5% and the share of applications backed by the Veterans Administration fell to 12.4% from 13.4% the week prior.
Thanks to Mortgage Bankers Association and HousingWire.
Also read: 4 Things for Homebuyers to Consider in 2020, Podcast: Amazing Housing Rebound Is Here! | Tim and Julie Harris, Fall Market Shifts Towards Buyers
