The Mortgage Bankers Association said their weekly Mortgage Applications Survey last week was just the “calm before the storm” – and they were very right.
Mortgage applications surged 15.1 percent last week over the week earlier – with the refinance index 224 percent above the same week in 2019, MBA data released Wednesday shows. The jump in applications comes as 30-year fixed rate mortgages dropped to their lowest levels since 2013.
“Given the further drop in Treasury rates this week, we expect refinance activity will increase even more until fears subside and rates stabilize,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “We are now at the start of the spring homebuying season. While purchase applications were down a bit for the week, they are still up about 10 percent from a year ago. The next few weeks are key in whether these low mortgage rates bring in more buyers, or if economic uncertainty causes some home shoppers to temporarily delay their search.”
That will be interesting to watch, as Redfin CEO Glenn Kelman says the coronavirus is starting to impact home searches.
“Over the past three days in Seattle, where the first U.S. coronavirus death was confirmed on Saturday, February 29, we’ve seen a significant drop in demand from homebuyers and sellers,” Kelman said.
Other findings in the weekly MBA report include:
- The refinance share of mortgage activity increased to 66.2 percent of total applications from 60.8 percent the previous week.
- The adjustable-rate mortgage (ARM) share of activity increased to 6.4 percent of total applications.
- The FHA share of total applications decreased to 9.3 percent from 10.5 percent the week prior.
- The VA share of total applications decreased to 10.5 percent from 11.8 percent the week prior.
- The USDA share of total applications decreased to 0.4 percent from 0.5 percent the week prior.
Read the full MBA report here.