Homebuyers haven’t been this busy looking for financing in more than a decade.
An index tracking mortgage applications to buy single-family homes rose 4 percent, seasonally adjusted, last week from the first week of June.
Though the Mortgage Bankers Association’s metric has been logging gains for nine consecutive weeks, the volume of purchase applications last week was the greatest since 2009.
“The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a gradual improvement in consumer confidence,” said Joel Kan, MBA’s executive at the helm of industry forecasting, in a statement.
The organization’s index tracking applications to refinance also surged, rising 10 percent last week, and is up 106 percent year-over-year. The increase marked the second straight weekly gain for refinance activity. Prior to the first week of June, applications to refinance had dropped every week for nearly two months.
Kan attributed the upward trend to mortgage rates hitting a record low in MBA’s survey last week.
The interest rate for the average 30-year mortgage of $510,400 or less dropped to 3.30 percent, down from 3.38 percent the prior week. Average jumbo mortgage rates sank to 3.67 percent from 3.70 percent.
Home-loan applications overall increased 8 percent compared to the first week of June, when the MBA index — which tracks 75 percent of the U.S. home mortgage market — saw a 9 percent increase after weeks of no growth.
MBA estimated that 672,000 new single-family homes were sold in May, seasonally adjusted, based on data from its monthly survey of home builders’ purchase loan application data.
Kan called it another indicator of the housing market’s recovery as restrictions introduced to curb Covid-19 are lifted.
“We expect to see additional near-term strength in the coming months from the resumption of delayed sales activity caused by the social distancing and stay-at-home orders during March and April,” Kan continued.
At the end of May, Kan had sung a more cautious tune, warning that home buying could be hampered in “coming months” by high unemployment rates and low housing supply.
Write to Erin Hudson at [email protected]