According to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 29, 2020. This week’s results included an adjustment for the Memorial Day holiday.
The Market Composite Index, a measure of mortgage loan application volume, decreased 3.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 14 percent compared with the previous week.
The Refinance Index decreased 9 percent from the previous week and was 137 percent higher than the same week one year ago.
The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index decreased 7 percent compared with the previous week and was 18 percent higher than the same week one year ago.
Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting says: “Purchase applications continued their recent ascent, increasing 5 percent last week and 18 percent compared to a year ago. The pent-up demand from home buyers returning to the market continues to support a recovery from the weekly declines observed earlier this spring”.
Kan adds: “In contrast to the upswing in purchase activity, refinance applications fell for the seventh consecutive week – even as the 30-year fixed-rate hit another MBA survey-low of 3.37 percent. After reaching a peak of 76 percent earlier this year, refinances now account for less than 60 percent of activity, and the index is now at its lowest level since February 21.”
It is clear there are still many households affected by widespread job losses and the current economic downturn. High unemployment and low housing supply may restrain a more meaningful rebound in purchase applications in the coming months.
The FHA share of total applications remained unchanged from 11.2 percent the week prior. The VA share of total applications decreased to 12.0 percent from 12.4 percent the week prior. The USDA share of total applications increased to 0.7 percent from 0.6 percent the week prior.
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[Form id=”1″]Sources:
https://www.mba.org/2020-press-releases/june/mortgage-applications-decrease-in-latest-mba-weekly-survey
https://www.youtube.com/watch?v=cnYFjCcPsHI