According to the Mortgage Bankers Association, mortgage applications in the sector of home purchases have jumped by 5% during the last week of May. Moreover, the number of mortgage applications for 2020 increased by 18% from the last year. During the end of February and throughout March as the COVID-19 outbreak was driving businesses to halts, closings, and delays, mortgage applications dropped by 35%. However, with the noted demand in mortgage rates on the rise, low interest rates are reaching new highs.
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Average Interest Rates Reaching 3.18%, Demand for Mortgage Rallies
Average interest rates on 30-year mortgages fell to a record low at nearly 3.18%. Record mortgage rates are hitting the market once again as the number of applications for mortgages is rising from week to week. New homebuyers are rushing to buy homes as the housing inventory is running low. However, the unemployment rates are rising as well s a consequence of the fallout. That means that there could be a rebound in the number of applications for home purchases.
Mortgage Applications for Refinancing Going Down
Mortgage applications for refinancing home purchases fell by 9% during the last week. However, despite the drop during the week, refinancing mortgage applications are still higher than the last year. Mortgage rates for refinancing still stand 137% higher than the rates in 2019. Index for refinancing mortgages is at the lowest level since February.
Rushing Buyers Supplying the Demand for Mortgage Applications
COVID-19 has changed the way the industry is functioning, in the meanwhile deeming many sectors as non-essential. On one side, we have higher unemployment rates, but also, we are seeing an increasing number of mortgage applications. Buyers are rushing to buy a few homes left in the market as the inventory is reducing with the COVID-19 crisis. The case is creating support for the demand for mortgage applications.
