Applications for mortgages to purchase homes gained for the sixth consecutive week to a level that was 6.7% higher than a year ago, back when a deadly pandemic wasn’t interrupting the spring home-buying season.
A seasonally adjusted index measuring purchase applications jumped 9% last week, according to a report from the Mortgage Bankers Association. Applications for refinancings fell 0.2% from the prior week, though the level was 176% higher than a year ago, MBA said.
Last week’s so-called purchase apps were up 54% from early April when most U.S. states were under lockdown orders to keep people at home in an effort to stem the spread of COVID-19, said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
“The housing market is continuing its path to recovery as various states reopen, leading to more buyers resuming their home search,” said Joel Kan, an MBA associate vice president.
The surge in purchase demand drove the overall index, measuring both purchase and refi applications, higher by 2.7% on a seasonality adjusted basis from the prior week, the report said.
Demand is being driven by a shortage of homes on the market that preceded the epidemic, coupled with mortgage rates near the lowest level ever recorded.
The supply of properties on the market at the end of April was 1.47 million, the National Association of Realtors said last week. That’s the lowest level ever recorded for the month, said Lawrence Yun, NAR’s chief economist.
Last week, the average U.S. rate for a 30-year fixed mortgage dropped to 3.24%, within one basis point of the all-time low set two weeks earlier, according to Freddie Mac.
The share of applications for mortgages backed by the Federal Housing Administration decreased to 11.2% from 11.5% in the week prior, the report said. The share of applications backed by the Veterans Administration fell to 12.4% from 13.4%, the report said.