Consumers Plunge Back Into Homebuying Market

There’s good news for the economy on the home-buying front.

“Purchase applications increased 9 percent last week – the sixth consecutive weekly increase and a jump of 54 percent since early April,” said Joel Kan, an economist at the Mortgage Bankers Association (MBA). “Additionally, the purchase loan amount has increased steadily in recent weeks and is now at its highest level since mid-March.”

Mortgage applications ticked up 2.7 percent for the week ending May 22 compared to the previous week, as states moved to increase economic activity. The new data comes from the MBA’s Weekly Mortgage Applications Survey.

However, as Kan noted in a prepared statement, although mortgage rates were close to the association’s “all-time survey low, refinance activity was essentially flat, but still 176 percent higher than last year. Conventional refinance applications increased 2 percent, while government refinancing was down almost 7 percent.”

At the state level, New York saw purchase applications rise 19.7 percent as the COVID-19 crisis eased. In California, non-seasonally adjusted home purchase applications rose 11.6 percent.

The survey, which has been conducted weekly since 1990, covers over 75 percent of all U.S. retail residential mortgage applications.

In other homebuying news, sales of new single-family homes were up 0.6 percent in April compared to March, but they fell by 6 percent compared to April 2019, according to the U.S. Census Bureau and the Department of Housing and Urban Development (HUD).

One of the big challenges as the U.S. reopens the economy is consumers’ lack of willingness to plunge back into public life. PYMNTS’ ongoing survey of 10,000 consumers shows that many will require a vaccine to alleviate their fears of dying. This will make it difficult for the U.S. economy to recover in the months ahead.

In early March, most consumers measured the duration of the pandemic in terms of weeks, but that has changed radically.