Key Highlights
- Interest rates for a 30-year fixed mortgage decreased to 3.43% from 3.45% the week prior
- Mortgage demand from buyers jumped +12% from week prior
- Demand for refinance applications fell -7% last week from the week prior
- Total demand for mortgage applications fell by -3.3% according to the Mortgage Bankers Association
There are some positive indicators that buyers might be returning to the housing market. Purchase applications rose an eye-opening +12% last week compared to the prior week, according to the Mortgage Bankers Association (MBA) seasonally adjusted index, despite volume remaining -20% lower than the same week one year ago.
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Joel Kan, associate vice president of economic and industry forecasting with the MBA, said, “The 10 largest states (by application volume) had increases in purchase activity, which is potentially a sign of the start of an upturn in the pandemic-delayed spring home buying season, as coronavirus lockdown restrictions slowly ease in various markets. California and Washington continued to show increases in purchase activity, with New York seeing a significant gain after declines in five of the last six weeks.”
Anecdotally, real estate firms, home listing websites and even some homebuilders are seeing more action and returning buyers.
The MBA also indicated that refinance application fell -7% for the week but were still +218% higher than one year ago. Refinances have become more difficult to do now that lenders have stopped offering certain products and have increased rates due to the new market risk from the mortgage bailout program. Overall, the refinance share of mortgage activity dropped to 71.6% of total mortgage application volume from a 75.4% share the week prior.
Mortgage rates dropped to a record low on the MBA index to 3.43% from 3.45% the week before on a 30-year fixed mortgage with conforming loan balances of $510,400 or less. Points (with origination fees) rose 0.34 from 0.29 for loans with a 20% down payment. This rate was approximately a full percentage point higher than one year ago.
Thanks to CNBC’s Diana Olick.
Also read: Default Cycle Has “Officially” Begun, Compass Still Adding Agents AND Still Cutting Salaries & Hours, Weekly Mortgage Applications Tumble -29.4%
