AEI’s latest housing market indicator shows that the purchase rate lock volume for the week of May 25 was up 19% from a year ago, with analysis saying the worst of the “near-term effects” of COVID-19 could be behind housing.
The purchase rate lock volume is back to pre-pandemic levels when the volume was up 24% compared to 2019.
Additionally, the report adds that over the past 14 weeks, the market has not only returned to “normalcy” but is up substantially from prior weeks when the weekly annual average decline was 15%.
Year-to-date purchase lock volume is up 12% annually, according to the data.
The only three states that had purchase volumes of more than 10% below last year’s volume were Massachusetts (-12%); Hawaii (-21%); and Minnesota (-11%). Some states seeing the biggest rise purchase rate volumes were West Virginia and South Carolina (37%); Florida (39%); Mississippi (38%); Louisiana (35%); and Idaho (33%).
Jacksonville recorded the largest increase in purchase rate lock volume of 59%, followed by Pittsburgh (54%); Orlando (41%); and North Port, Florida ( 38%).
First-time buyers accounted for a higher share of rate locks than in 2019 and is now similar to the first weeks of 2020. The first-time buyer share now stands at 44.7% of owner-occupied rate locks, which is down from a high of 50.1%, and last year’s 45.9%.
This report comes shortly after the Mortgage Bankers Association (MBA) reported purchase applications rose 5% weekly for the week ending of May 29.
This rise is also 18% higher than during the same period last year. Overall, mortgage applications fell 3.9% week-over-week, mostly due to a 14% decline in the Refinance Index. Data from the MBA shows refinances are still 137% during the same week in 2019.
“The pent-up demand from homebuyers returning to the market continues to support a recovery from the weekly declines observed earlier this spring," said Joel Kan, MBA's AVP of Economic and Industry Forecasting. "However, there are still many households affected by widespread job losses and the current economic downturn. High unemployment and low housing supply may restrain a more meaningful rebound in purchase applications in the coming months."