Purchase applications rise as states plan reopenings

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Published Date 5/4/2020

What goes down during challenging times eventually goes up again. Business Insider's Carmen Reinicke reports that weekly applications to purchase a home are on the rise. This is after a five-year year low hit during the coronavirus pandemic. "The seasonally adjusted purchase index jumped 12% from one week earlier, according to data for the survey ending April 24 and released Wednesday by the Mortgage Bankers Association. Mortgage loan application volume fell 3.3% in the week, and the refinance index also fell 7%," he says.

The good news comes after a few weeks of sparse application numbers. And despite mortgage interest rates being at historical lows, the coronavirus pandemic and state lockdowns kept consumers from either having the ability to buy a home or simply stopped them in their tracks from making buying decisions. So experts are simply calling this a delay caused by the virus, and not a trend.

Reinicke quotes economic and industry forecaster Joel Kan saying," The ten largest states had increases in purchase activity, which is potentially a sign of the start of an upturn in the pandemic-delayed spring home buying season, as coronavirus lockdown restrictions slowly ease in various markets."

Western states are at the head of the pack, with California and Washington both continuing to show increases in purchase activity, while New York saw a significant gain after declines in five of the last six weeks. While refinance activity declined, rates still remained higher than those for purchase loans, according to Kan. "Lenders are still working through pipelines at capacity, and observed changes in credit availability for refinance loans have also in turn impacted rates."

Source: Businessinsider.com | TBWS

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