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The Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending on February 7, 2020, reveals that mortgage applications increased 1.1% from the prior week.
This data was taken from the Market Composite Index, a medium which measures mortgage loan applications from week to week. When remaining unadjusted, the percentage spikes to a 3% increase from the week prior to February 7.
A 5% increase was recorded for the Refinance Index, which was an impressive 207% higher than the posting for the same week last year. As for the seasonally adjusted Purchase Index, it experienced a 6% drop from the prior week, while the unadjusted Purchase Index actually rose 0.3% and posted 16% higher than it did this same week last year.
Joel Kan, MBA's AVP of Economic and Industry Forecasting, had this to say regarding the movement in mortgage applications: ”The mortgage market continues to be active in early 2020, as applications increased for the third straight week. Rates also rose, but still remained close to their lowest levels since October 2016. The refinance index climbed to its highest level since June 2013, and refinance loan sizes also increased as a result of an active jumbo lending market."
Kan then pointed to January’s purchase applications and what their specific movement may entail: "Last month was the strongest January for purchase applications since 2009, which is perhaps a sign that mild weather brought out prospective buyers earlier than normal. Despite a decline last week, purchase activity was still up almost 16% from a year ago.”
With such hopeful news and encouraging statistics, MBA’s report bolstered many in the housing market, who hope that such positive gains will continue throughout the duration of 2020, and beyond.
Freddie Mac reported on February 6 that interest rates fell for the third consecutive week, with the 30-year fixed-rate interest rate dropping to a three-year low of 3.45%.
“As rates fell for the third consecutive week, markets staged a rebound with increases in manufacturing and service sector activity,” said Sam Khater, Freddie Mac’s Chief Economist. “The combination of very low mortgage rates, a strong economy and more positive financial market sentiment all point to home purchase demand continuing to rise over the next few months.”
