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Applications to buy homes rise for fourth week with New York leading the way

The overall home loan market was flat as refinance activity dropped

(Credit: iStock)
(Credit: iStock)

An index tracking mortgage applications to buy single-family homes continued its upward trajectory with a seasonally adjusted 11 percent gain last week compared to the prior week.

It’s the fourth week in row that the Mortgage Bankers’ Association weekly survey, known as the purchase index, has reported gains in home loan applications.

The previous week, the purchase index jumped 6 percent. The two preceding weeks saw applications increase by 12 percent and 3 percent, respectively.

Refinance applications fell by 3 percent last week, though the volume is still up more than 200 percent year-over-year. It was the fourth week MBA’s index tracking refinancing decreased. As a result, MBA’s overall index that tracks 75 percent of the U.S. home loan market remained flat.

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Joel Kan, MBA’s executive at the helm of industry forecasting, said the drop in refinancing could be attributed to a 5 percent fall in conventional refinances.

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The interest rate for conventional 30-year mortgages of $510,400 or less increased three basis points to 3.43 percent. The rate for jumbo loans held steady at 3.69 percent.

Kan said he anticipates that the “stark recovery” in purchase applications will persist.

“We expect this positive purchase trend to continue — at varying rates across the country — as states gradually loosen social distancing measures,” he said in a statement.

Kan noted that New York saw the biggest increase in activity in the survey, with a 14 percent unadjusted increase in purchase applications compared to the prior week’s 9 percent increase. California reported an 11 percent increase, compared to 10 percent the week before.

But activity in both states is still down significantly from a year ago, with New York and California seeing 43 percent and 22 percent drops, respectively.

Write to Erin Hudson at ekh@therealdeal.com

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Housing MarketMortgages