Summer seems to be picking up where the spring homebuying season left off, and even real estate professionals are surprised by the strong housing market rebound, according to Realtor.com. Low mortgage rates and pent-up demand are driving the uptick in mortgage applications for purchase. The economy is far from healthy, but potential homebuyers who have retained their jobs are itching to get their home search going. Though markets that were hardest hit by the coronavirus are not seeing as big of a bump as we head into summer, the strength in demand is a good sign that the summer market will take off.
Until recently, the prognosis for the housing market wasn't great. With the economy in a free fall, home sellers swiftly took down their "For Sale" signs and many buyers chose to wait out the coronavirus pandemic. It was like the pause button was pushed on the normally bustling spring home-buying season.
But as states reopen their economies, the summer real estate market just might turn out to be hotter than anyone was anticipating. For the first time in more than two months, mortgage applications for home purchases were up year over year, rising an impressive 8.7% as buyers raced to lock in record-low mortgage rates in the week ending May 22.
This is according to a weekly survey from the Mortgage Bankers Association that spans more than 75% of U.S. residential mortgage applications. The purchase loans did not include mortgage refinances for those who already own homes.