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Mortgage Demand From Homebuyers Rises 13% From Last Year

Mortgage Demand From Homebuyers Rises 13% From Last Year
(FlynT/Dreamstime)

By    |   Wednesday, 10 June 2020 12:37 PM

Applications for loans to purchase a home rose 5% last week from the previous week and were 13% higher than a year ago, according to the Mortgage Bankers Association. 

The Mortgage Bankers Association’s Market Composite Index, a measure of mortgage loan application volume, increased 9.3 percent on a seasonally adjusted basis from one week earlier.

The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index increased 15 percent compared with the previous week and was 13 percent higher than the same week one year ago.

Applications for purchase loans plummeted when the pandemic hit the U.S. But with mortgage rates near record lows, Americans are increasingly looking to upgrade their homes. That’s buoyed the housing market, with a low supply of affordable houses propping up prices and prompting bidding wars in some markets.

"Fueled again by low mortgage rates, pent-up demand from earlier this spring, and states reopening across the country, purchase mortgage applications and refinances both increased," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.

"The recovery in the purchase market continues to gain steam, with the seasonally adjusted index rising to its highest level since January. Purchase activity increased for the eighth straight week and was a notable 13 percent higher than a year ago," said Kan.

"Refinances moved higher for the first time in nearly two months, with both conventional and government applications rising and the overall index coming in 80 percent above year-ago levels."

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.38 percent from 3.37 percent.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.83 percent from 2.85 percent.

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Americans are trying to take advantage of record-low mortgage rates.
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Wednesday, 10 June 2020 12:37 PM
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