Mortgage applications continued an eight-week streak of gains as home buyers rush back into the housing market. Purchase applications, viewed as a gauge for future home sales, were up 5% last week compared to the previous week.
Despite the pandemic, applications for home purchases are now 13% higher than a year ago, the Mortgage Bankers Association reported Wednesday. “The recovery in the purchase market continues to gain steam, with the seasonally adjusted index rising to its highest level since January,” says Joel Kan, an economist with the Mortgage Bankers Association.
The reopening of states, low interest rates, and pent-up housing demand are prompting an upswing in mortgage applications, even in the midst of a pandemic and civil unrest, according to MBA. Mortgage rates continue to hover near record lows. The MBA reports the contract rate on a 30-year fixed-rate mortgage last week was 3.38% for conforming loans with a 20% down payment.
The Federal Housing Administration’s share of mortgage applications rose to 11.5% from 11.2% the previous week, while the Veteran’s Affairs share of applications also saw an uptick to 12.43% from 12%, the MBA reports. Meanwhile, the refinance share of application activity jumped 11% last week and is 80% higher than a year ago.
Last year, mortgage rates were 74 basis points higher.
Source: “Mortgage Applications Jump 13%,” HousingWire (June 10, 2020) and “Mortgage Demand From Home Buyers Amazes Again, Now Up 13% Annually Despite Rising Rates,” CNBC (June 10, 2020)
