The number of prospective homebuyers rose again in the final week of May and is now higher than it was a year ago.
An index tracking the weekly volume of mortgage applications to buy homes increased 5 percent last week, seasonally adjusted, and was 18 percent above its level during the same period in 2019 on an unadjusted basis.
It also marked the seventh week running that the Mortgage Bankers Association metric jumped, though in prior weeks the increases were larger on a percentage basis. The third week of May saw a 9 percent gain, while the week prior saw a 6 percent rise.
Joel Kan, MBA’s executive at the helm of industry forecasting, cautioned that the upward trajectory of MBA’s purchase index may not continue much longer.
“There are still many households affected by the widespread job loss and current economic downturn,” he said in a statement. “High unemployment and low housing supply may restrain a more meaningful rebound in purchase applications in the coming months.”
The MBA index that tracks refinancing activity continued its downward trend for a seventh week. The adjusted refinance metric dropped 9 percent in the last week of May.
Refinancing now accounts for just under 60 percent of the total applications that MBA tracks in its survey.
Refinance activity was 63 percent of total applications the previous week after peaking at 76 percent earlier this year. The index is still up 137 percent compared to the same week a year ago, however.
Last week, the 30-year fixed-rate mortgage rate for conforming loans of $510,400 or less was 3.37 percent, an all-time low for MBA’s weekly survey, which accounts for 75 percent of the U.S. residential mortgage and dates back to 1990. That was a drop of 5 basis points from the prior week’s rate of 3.42.
Jumbo rates also dropped 5 basis points, to 3.66 percent.
Write to Erin Hudson at [email protected]
Clarification: The calculation of an 18 percent increase year-over-year in applications to buy homes was based on the MBA’s unadjusted purchase index.