Buyer interest is on the rise! Here are new updates on the industry’s bounce back:
- In states that have reopened, buyers are coming back to the housing market much faster than expected, and mortgage applications jumped 11%. Applications to purchase a home rose for the fourth straight week, according to the Mortgage Bankers Association’s seasonally adjusted index.
- “There continues to be a stark recovery in purchase applications, as most large states saw increases in activity last week,” said MBA economist Joel Kan. “We expect this positive purchase trend to continue — at varying rates across the country — as states gradually loosen social distancing measures, and some of the pent-up demand for housing returns in what is typically the final weeks of the spring home buying season.”
- Low mortgage rates are increasing buyer demand. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $510,400 increased from a record low 3.40% to 3.43%. Points, including the origination fee, decreased to 0.29 from 0.30 for loans with a 20% down payment.
- Citi Research suggests that the worst may be over for the home construction industry.
- “Construction activities have been one of the first to resume in many states that have begun phased reopenings,” Citi economists wrote. “We would expect that both starts and permits have likely reached a bottom in April.”
- “Applications for home purchases continue to recover from April’s sizable drop and have now increased for five consecutive weeks,” said Joel Kan, an MBA economist. “Government purchase applications, which include FHA, VA, and USDA loans, are now 5 percent higher than a year ago, which is an encouraging turnaround after the weakness seen over the past two months.”