Mortgage Demand for Purchase Spikes 18% as Interest Rates Set Record Low

If you’ve ever opened a shaken soda can before, you have an idea how pent-up housing demand is affecting the market right now. The mortgage applications to purchase a home jumped 5 percent this week, and eclipsed the volume at the same time last year by 18 percent, according to CNBC. For context, the applications during the height of the pandemic were down 35 percent annually. Though the country is still hurting from the economic toll, restless homebuyers who are ready to dive into the housing market are finding record low interest rates: The 30-year fixed mortgage fell to just 3.37 percent.

Mortgage applications numbers get stronger each week as homebuyers rush back into the market, hoping to get their hands on what few homes there are for sale. Another record-low mortgage rate didn’t hurt.

Mortgage applications to purchase a home rose 5% for the week and were a stunning 18% higher than a year ago, according to the Mortgage Bankers Association’s seasonally adjusted index. As the coronavirus outbreak was surging six weeks ago, applications by homebuyers were down 35% annually.

“The pent-up demand from homebuyers returning to the market continues to support a recovery from the weekly declines observed earlier this spring,” said Joel Kan, an MBA economist. “However, there are still many households affected by the widespread job losses and current economic downturn. High unemployment and low housing supply may restrain a more meaningful rebound in purchase applications in the coming months.”

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