'Pent-Up Demand' Drives Growth in Homebuyer Interest for Third Straight Week
After spending so much time at home, some Americans are itching to move into a new one. “Pent-up demand for homebuying” drove buyer interest up for the third straight week, according to the Mortgage Bankers Association. The weekly volume of applications for loans to buy a home rose 6 percent on a seasonally-adjusted basis for the week ending May 1, the third straight week-over-week increase. This comes after homebuyers retreated in the middle of March and beginning of April due to the uncertainty surrounding the coronavirus. A hazy future still lies ahead as states reopen, but the uptick in loans for purchase is a positive sign.
A weekly gauge of home buyer interest ticked up for the third week in a row—a sign of “pent-up demand for home buying,” according to the organization that administers the survey.
The Mortgage Bankers Association’s Purchase Index, which measures the weekly volume of applications for loans to buy a home, rose 6% on a seasonally-adjusted basis and 7% on an unadjusted basis for the week ending May 1. In a news release, MBA chief economist Mike Fratantoni credited that week-over-week increase to “strong growth in Arizona, Texas and California,” which posted increases of 11%, 10.3% and 10.1%, respectively.
With state lockdowns only beginning to be eased, much is still unknown about how an economic recovery from the coronavirus crisis will take shape. But a third week-over-week increase in loan applications is a positive sign for the housing market. The survey is a regular pulse-check of buyer interest in residential real estate—and for much of March and April it was falling.