According to the latest weekly survey conducting by Mortgage Bankers Association (MBA) [1]for the week ending on May 22, spring has brought a surge in mortgage applications to the housing industry.
The MBA revealed that the number of mortgage applications rose 2.7% from the prior week’s statistics.
This weekly survey, known as the Market Composite Index, measures the volume of mortgage loan applications on a weekly basis. This 2.7% shows the seasonally adjusted amount, while unadjusted results reveal a 3% rise from the previous week.
As for the Refinance Index, MBA’s report divulged a decrease of 0.2% within the same week’s time frame, while the Purchase Index (seasonally adjusted) was shown to have risen 9%. When unadjusted, the Purchase Index revealed a rise of 7%.
Joel Kan, MBA’s AVP of Economic and Industry Forecasting, commented on this week’s rise in applications: "The housing market is continuing its path to recovery as various states reopen, leading to more buyers resuming their home search. Purchase applications increased 9% last week—the sixth consecutive weekly increase and a jump of 54% since early April. Additionally, the purchase loan amount has increased steadily in recent weeks and is now at its highest level since mid-March.”
Kan added even more details that point to hope on the horizon: "Despite mortgage rates hovering near MBA's all-time survey low, refinance activity was essentially flat but still 176% higher than last year. Conventional refinance applications increased 2%, while government refinancing was down almost 7%.”
Further details in the report state the refinance share of mortgage activity, which fell to 62.6% of total applications (the previous week was at 64.3%). As for the adjustable-rate mortgage (ARM) share of activity, that rose to make up 3.4% of all placed applications.
Odeta Kushi, Deputy Chief Economist with First American Financial Corporation, said on Twitter that while purchase applications are up 54% since April, the lack of inventory could lead to further house-price appreciation.
Purchase applications show 54% recovery since early April, now 9% higher than one year ago. Pent up spring demand is clear, but severe lack of inventory is the problem. The continuation of this dynamic will result in further house price appreciation.https://t.co/382S3wENxw [2]
— Odeta Kushi (@odetakushi) May 27, 2020 [3]