Homebuyers’ Mortgage Demand Rises 28%

Thanksgiving week isn’t usually a popular time to buy a home, but most of this year’s economic numbers are second to none, especially in the pandemic-plagued housing market.

Mortgage applications to purchase a home jumped 9% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted and vacation-adjusted index. Purchase requests were 28% higher than a year ago.

“Purchasing activity continued to post impressive year-over-year gains, with the conventional and government segments of the market posting another week of growth,” said Joel Kan, associate vice president of MBA economic and industrial forecasts. “Housing demand remains strong, and despite extremely tight inventories and rising prices, home sales have been operating at their strongest pace in over a decade.”

Rapidly rising prices caused the average home loan amount to hit $ 375,000 last week, the highest since the MBA survey was launched in 1990. Low mortgage rates don’t just give home buyers emotional motivation, they also give them more purchasing power and help them. to inflate prices.

The average contractual interest rate for 30-year fixed rate mortgages with compliant loan balances ($ 510,400 or less) remained unchanged at 2.92% last week, a record high, with points dropping from 0.31 to 0.35 (including set-up costs) for loans with a down payment of 20%. This rate was 105 basis points higher a year ago.

Home loan refinancing requests fell 5% for the week, but are 102% higher from a year ago.

“The ongoing wave of refinancing has been beneficial for homeowners looking to lower their monthly payments during this difficult economic time brought on by the pandemic,” Kan said, adding that the mortgage industry is about to have its best year. in terms of creations since 2003.