Tags: mortgage | demand | record low | interest rates

Mortgage Demand Rises 4.6 % Amid Record-Low Interest Rates

Mortgage Demand Rises 4.6 % Amid Record-Low Interest Rates
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Wednesday, 07 October 2020 11:06 AM

Mortgage applications increased 4.6 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 5 percent compared with the previous week, the MBA said.

The Refinance Index increased 8 percent from the previous week and was 50 percent higher than the same week one year ago.

The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 21 percent higher than the same week one year ago.

"Mortgage rates declined across the board last week - with most falling to record lows - and borrowers responded. The refinance index jumped 8 percent and hit its highest level since mid-August," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.

"Continuing the trend seen in recent months, the purchase market is growing at a strong clip, with activity last week up 21 percent from a year ago. The average loan size increased again to a new record at $371,500, as activity in the higher loan size categories continues to lead growth," Kan said.

"There are signs that demand is waning at the entry-level portion of the market because of supply and affordability hurdles, as well as the adverse economic impact the pandemic is having on hourly workers and low-and moderate-income households. As a result, the lower price tiers are seeing slower growth, which is contributing to the rising trend in average loan balances."

The refinance share of mortgage activity increased to 65.4 percent of total applications from 63.3 percent the previous week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.01 percent from 3.05 percent.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.59 percent from 2.65 percent.

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Mortgage applications increased 4.6 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
mortgage, demand, record low, interest rates
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2020-06-07
Wednesday, 07 October 2020 11:06 AM
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