A jump in weekly mortgage applications points to a remarkable recovery in the housing market.
Nationally, purchase volume was down just 1.5% compared to a year ago – an amazing recovery from just a month ago when purchase volume was down 35% compared to last year. Mortgage applications to buy a home were up 6% week over week.
It looks like the home buyers at least have shaken off the effects of the corona virus and are getting back into the market.
Meanwhile the OC Register reports that home buying in Orange County had its worst month on record in April with sales down 34% from the previous year. From what I have experienced, home buyers are definitely back in the market. Orange County Homes for Sale are still below normal levels so there is still a lack of inventory as some sellers have hesitated to list their homes for sale due to Covid-19 epidemic.
As states reopen, so are open houses, and buyers have been coming out in force, if masked. Record low mortgage rates, combined with strong pent-up demand from before the pandemic and a new desire to leave urban downtowns due to the pandemic, are driving buyers back to the single-family home market. It remains to be seen if this is simply the pent-up demand or a long-term trend.
Buoying buyers, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $510,400 decreased to 3.41% from 3.43%. Points including the origination fee increased to 0.33 from 0.29 for 80 percent loan-to-value ratio loans.
Low rates are not, however, giving current homeowners much incentive to refinance. Those applications fell 6% for the week but were still 160% higher than one year ago, when interest rates were 92 basis points higher. That is the lowest level of refinance activity in over a month.
Source – the mortgage bankers association.