Size of home purchase loans hits record high

Mortgage applications to buy homes rose by 5%

National /
Jul.July 08, 2020 12:00 PM
The final week of June saw the average loan size hit $360,300, a record high in the history of MBA’s purchase index (iStock)
The final week of June saw the average loan size hit $360,300, a record high in the history of MBA’s purchase index (iStock)

Homebuyers celebrated before the July 4 holiday weekend by applying for mortgages.

An index tracking applications to buy single-family homes increased 5 percent last week, seasonally adjusted, from the week prior.

The Mortgage Bankers Association metric, known as the purchase index, fell for the last two weeks in June.

Joel Kan, MBA’s executive at the helm of industry forecasting, called last week’s rebound a “recovery,” noting that it was the highest level of purchase applications in nearly a month and volume was up 33 percent year over year.

“The average purchase loan size increased to $365,700 – also another high – as borrowers contend with limited supply and higher home prices,” he said in a statement.

The final week of June saw the average loan size hit $360,300, a record high in the history of MBA’s purchase index, which has been measured weekly since 1990.

The 30-year fixed mortgage rate hit a new low of 3.26 percent, down from 3.29 percent in the last week of June. Jumbo rates dropped to 3.52 percent from 3.59 percent.

Refinancing activity also saw a bump. MBA’s index tracking refinance applications increased 0.4 percent in the first week of July compared to the week before. That’s a 111 percent year-over-year jump.

MBA’s overall index, which encompasses all applications and covers 75 percent of the residential mortgage market, rose 2.2 percent last week.

Write to Erin Hudson at [email protected]


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