Residential mortgage applications have been surging for five consecutive weeks, thanks to pent-up demand in March and April, and a coronavirus-induced by the growing desire of consumers to find more space and escape from urban apartments. Purchase mortgage volume fell 3% for the week, but it has been a remarkable 18% higher than a year earlier.
“One of the factors that can potentially crimp growth in the coming months, it is that the release of pent-up demand from earlier this spring, is in contradiction with the tight supply of new and existing homes on the market,” said Joel Kan, MBA’s chief economist. “Additional housing stock is needed to give buyers more options and to keep home prices rising too fast. ”
Applications to refinance a home loan fell from 12% for the week, but were 76% compared to the same week in 2019. Lenders may not offer the best rates on refinances, it is enough to keep up with a high volume, they are trying to see from the property. In addition, the difference between where rates were a year ago and where they are now narrows.
“In spite of the drop in the last week, the MBA even expects refinancing of loans to increase to $ 1.35 billion in 2020 — the highest level since 2012,” Kan said.
The refinancing share of mortgage loans decreased to 61.3% of total applications from 63.2% the previous week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $ 510,400 or less remained unchanged at 3.30%. Points, including the origination fee increased to 0.32 from 0.29 for loans with a down payment of 20%.