Home buyers are retreating from the market as effects of the pandemic reverberate across the residential sector.
Loan applications for home purchases fell last week to the lowest levels since 2015, according to Bloomberg, which cited the Mortgage Bankers Association’s purchase index. And the four-week drop in the index was the steepest since 2010, in the aftermath of the Great Recession.
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“Mortgage applications fell last week, as economic weakness and the surge in unemployment continue to weigh heavily on the housing market,” Joel Kan, the trade group’s associate vice president of economic and industry forecasting, said in a statement.
“Purchase activity declined again, with the index dropping to its lowest level since 2015 and now down 33 percent compared to a year ago,” he added.
There was a 19 percent drop in refinancing applications, according to the group’s measure. Mortgage applications were down 17.9 percent.
Taken together, figures across different parts of the residential market paint a somber picture. Last month new leases fell to record lows and contract signings for properties above $4 million also tapered.
According to the Mortgage Bankers Association’s website, the weekly survey used to produce the loan-application index covers 75 percent of all U.S. retail residential mortgage applications. [Bloomberg] — Sylvia Varnham O’Regan