Boston Real Estate: Mortgage Demand Rises After the Election (Video)
Fall is usually the start of the slower season for the housing market, but nothing is usual in today’s pandemic-driven housing market. Potential homebuyers are seeing a slight rise in inventory and consequently rushing back into the fray.
Mortgage applications to purchase a home jumped 7% last week from the previous week, seasonally adjusted, according to the Mortgage Bankers Association. An additional adjustment was made to account for the Labor Day holiday. That is the highest level since April of this year. These applications were still 11% lower than the same week one year ago, but that was the smallest annual decline in 14 weeks.
“Even with the recent new listings slip, the gap with pre-COVID levels has shrunk significantly as more new sellers have entered the market so far in 2021 than last year,” according to the report.
Home prices continue to gain at a record pace, and that was also reflected in the purchase mortgage applications.
“Both conventional and government purchase applications increased, and the average loan size for a purchase application rose to $396,800. The very competitive purchase market continues to put upward pressure on sales prices,” said Joel Kan, an MBA economist.
Applications to refinance a home loan fell 3% for the week and were also 3% lower than the same week one year ago. Borrowers have not had a lot of incentive to refinance, as mortgage rates have barely budged in the last month, and rates are now higher than they were at the start of the year.
The refinance share of mortgage activity decreased to 64.9% of total applications from 66.8% the previous week.
November is not historically a strong season for homebuying, but this one, like the rest of 2020, isn’t following any rules.
Homebuyer demand is surging again, after taking a slight break around the election.
Mortgage applications to purchase a home rose 4% for the week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was a decisive 26% higher annually. Demand had fallen off for about a month around the election, even though mortgage rates hovered near a record low.