In a sign homebuyers in other parts of the country the country may be recovering from the shock of the coronavirus, purchase mortgage applications increased for the second week in a row, according to the Mortgage Bankers Association.
The MBA’s Purchase Index, part of its Weekly Mortgage Applications Survey, showed a seasonally-adjusted 6 percent increase and an unajusted 7 percent increase week-over-week for the seven days ending Friday, May 1. The increase follows a seasonally adjusted 12 percent week-over-week jump for the week ending April 29. Nonetheless, the index is 19 percent lower, year-over-year, for the week ending May 1.
Demand for purchase mortgages cratered at the beginning of April, let by successive double-digit declines for the weeks ending March 27 and April 3, before bottoming out in the week ending April 10 with a 2 percent decline followed by a 2 percent increase the following week.
Refinance applications dropped 2 percent week-over-week for the seven days ending on May 1 , but was 210 percent higher year-over-year. In total, all mortgage applications increased 0.1 percent from one week earlier. Refinance mortgages made up 70 percent of total applications.
“Mortgage application volume was unchanged last week, even as the 30-year fixed rate mortgage declined to 3.40 percent – a new record in MBA’s survey,” MBA Senior Vice President and Chief Economist Mike Fratantoni said in a statement. “Despite lower rates, refinance applications dropped, as many lenders are offering higher rates for refinances than for purchase loans, and others are suspending the availability of cash-out refinance loans because of their inability to sell them to Fannie Mae and Freddie Mac.”
The increases in purchase volume were driven by strong growth in Arizona, Texas and California, Fratantoni said, revealing what he called “the apparent, pent-up demand for homebuying” in states beginning to reopen.
Real estate market-watchers in Massachusetts have argued that the coronavirus economic crisis is causing buyers to merely postpone their purchases, not abandon them outright.
