Home loan applications fall again amid tight credit rules, weak job market

Rates hit a record low once again, according to the Mortgage Bankers Association

TRD NATIONAL /
Aug.August 05, 2020 01:30 PM
The weekly survey tracking purchase loans saw a seasonally adjusted decline of 2 percent in the final week of July. (iStock)

The weekly survey tracking purchase loans saw a seasonally adjusted decline of 2 percent in the final week of July. (iStock)

The volume of applications for home loans fell again last week, due to a weak job market and tightening credit rules.

The weekly survey tracking purchase loans saw a seasonally adjusted decline of 2 percent in the final week of July.

The Mortgage Bankers Association metric, known as the purchase index, is still up 20 percent year over year, according to Joel Kan, head of MBA’s industry forecasting. It marks the eleventh week of consecutive annual increases, though weekly volume fell during the last two weeks of July.

Kan noted that purchase loan size is increasing. The average loan size was $366,500 last week, up from $364,600 last week. He said it could be “a sign that the still-weak job market and tighter credit for government loans are constraining some first-time homebuyers.”

Refinance activity also dropped last week. MBA’s seasonally adjusted refinance index declined 7 percent compared to the previous week, though it was up 84 percent from the same week in 2019.

The decline came even as rates continued to sink to yet another record low in the history of MBA’s weekly survey, which has been conducted since 1990 and covers 75 percent of the U.S. residential market.

The average rate for a 30-year, fixed-rate mortgage was 3.14 percent last week, down from 3.20 a week earlier. Jumbo rates dropped 1 basis point to 3.51 percent.

Kan said he expects rates to remain low and that, in turn, will ultimately drive applications to refinance.

MBA’s overall index of all home loan applications fell 5.1 percent, seasonally adjusted, from the prior week.

Write to Erin Hudson at [email protected]


Related Articles

arrow_forward_ios
Photo illustration of Ron DeSantis (Getty, iStock)

DeSantis announces $250M rental, mortgage assistance fund

DeSantis announces $250M rental, mortgage assistance fund
Rendering of Belmont Village Coral Gables and Baptist Health South Florida CEO Brian L. Keeley

Baptist, Belmont gain approval for luxury senior living in Coral Gables

Baptist, Belmont gain approval for luxury senior living in Coral Gables
9885 Palomino Drive (Credit: Google Maps)

Resort Lifestyle Communities scores $36M construction loan for Lake Worth senior housing project

Resort Lifestyle Communities scores $36M construction loan for Lake Worth senior housing project
5010 Nob Hill Road (Credit: Google Maps)

Sunrise affordable senior housing facility sells for $30M

Sunrise affordable senior housing facility sells for $30M
Gov. Ron DeSantis (Credit: Joe Raedle/Getty Images)

Florida extends freeze on evictions and foreclosures to July

Florida extends freeze on evictions and foreclosures to July
Mark Zilbert

Let’s make a deal? Some resi sellers in Miami-Dade slash asking prices

Let’s make a deal? Some resi sellers in Miami-Dade slash asking prices
(Credit: iStock)

Home sales dropped big time in South Florida in April

Home sales dropped big time in South Florida in April
 Rendering of Father Marquess-Barry Apartments with Matt Rieger

HTG scores financing for senior affordable housing in Overtown

HTG scores financing for senior affordable housing in Overtown
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...