Homebuyers celebrated Thanksgiving last week dreaming of new, pricier digs.
An index tracking applications for loans to purchase homes surged last week by 9 percent, seasonally adjusted, from a week earlier, according to the Mortgage Bankers Association’s weekly survey.
The MBA metric has been increasing for the past three weeks and last week’s average size for purchase loans hit a record high of $375,200. That loan size had not been seen at any time in the survey’s 30-year history.
“Housing demand remains strong, and despite extremely tight inventory and rising prices, home sales are running at their strongest pace in over a decade,” said Joel Kan, MBA’s head of industry forecasting, in a statement.
While that’s true, economists, including Kan, are also warning that the housing market’s historic recovery is skewed toward high earners who did not lose income in the pandemic, while those who lost jobs or have poor credit are increasingly locked out of the market. That could have dire consequences for the broader economy, they say.
The average rate for a 30-year, fixed-rate mortgage was 2.92 percent, unchanged from a week earlier. Jumbo rates ticked up to 3.19 percent, up one basis point.
Refinancing activity slipped during the holiday week with the volume of applications down 5 percent from the previous week. It is still 102 percent higher than it was the same week last year.
Refinancing applications, which account for 69.5 percent of the home-loan applications tracked by MBA’s index, fell, causing its overall market index to drop 0.6 percent, seasonally adjusted.
The weekly survey covers 75 percent of the residential mortgage market.