Home >> Daily Dose >> Purchase Applications Rise to Highest Level in 11 Years
Print This Post Print This Post

Purchase Applications Rise to Highest Level in 11 Years

loan applications

Mortgage purchase applications increased 4% weekly and are 21% higher year-over-year—increasing to the highest level in more than 11 years, according to the Mortgage Bankers Association (MBA).

Overall, mortgage application rose 8% from the prior week for the week ending on June 12. Refinance applications rose 10% from the previous week and was 106% higher from last year.

"Purchase applications increased to the highest level in over 11 years and for the ninth consecutive week. The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a gradual improvement in consumer confidence," said Joel Kan, MBA's AVP of Economic and Industry Forecasting. "Mortgage rates dropped to another record low in MBA's survey, leading to a 10 percent surge in refinance applications. Refinancing continues to support households' finances, as homeowners who refinance are able to gain savings on their monthly mortgage payments in a still-uncertain period of the economic recovery."

According to the MBS, the share of FHA applications fell to 11% from the prior weeks’ 11.5%. The VA share of total applications decreased to 11.5 percent from 12.3 percent the week prior. The USDA share of total applications increased to 0.7 percent from 0.6 percent the week prior.

The average contract interest rate for a 30-year fixed-rate mortgage fell to 3.30% from 3.38%—the lowest in survey history.

As mortgage applications continue their recovery, realtor.com reports suburban housing markets are expected to see the quickest recovery from COVID-19. Views on the site for suburban zip codes grew by 13%—nearly double the pace of growth of urban areas.

Additionally, the time on the market increased by 25% in rural areas, compared to 30% for suburbs and 35% for urban areas. This represents the widest gap since realtor.com began tracking the data in 2016.

“This migration to the suburbs is not a new trend, but it has become more pronounced this spring,” said Javier Vivas, realtor.com Director of Economic Research. “After several months of shelter-in-place orders, the desire to have more space and the potential for more people to work remotely are likely two of the factors contributing to the popularity of the burbs.”

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
x

Check Also

Survey: Homeownership Remains Elusive for Baby Boomer Renters

A recent look into housing affordability by NeighborWorks America has found that three in five long-term baby boomer renters feel homeownership remains unattainable.