Mortgage applications in coronavirus hot spots plunged again last week to levels significantly lower than a year ago amid coronavirus stay-at-home orders and real estate shutdowns.
In California, mortgage applications dropped 16.5 percent last week from a week earlier – and 36.4 percent from the same week a year ago, according to the Mortgage Bankers Association weekly survey. In New York, applications were down 18.1 percent for the week and 35.6 percent from a year ago.
Overall, mortgage applications increased last week by 15.3 percent in the United States from a week earlier, as interest rates ticked down slightly after two straight weeks of rate increases.
“The bleaker economic outlook, along with the first wave of realized job losses reported in last week’s unemployment claims numbers, likely caused potential homebuyers to pull back,” said Joel Kan, MBA’s association vice president of Economic and Industry Forecasting. “Purchase applications were down over 10 percent, and after double-digit annual growth to start 2020, activity has fallen off last year’s pace for two straight weeks.”
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With the lower rates, MBA’s report showed refinance applications increased 26 percent from the previous week and were 168 percent higher than the same week one year ago.
The refinance share of mortgage activity increased to 75.9 percent of total applications from 69.3 percent the previous week. The adjustable-rate mortgage share decreased to 3.2 percent of total applications.
Kan said the industry fully expects slower mortgage activity in the weeks and months ahead. “Buyer and seller traffic – and ultimately home purchases – will also likely be slowed this spring by the restrictions ordered in several states on in-person activities,” he said.