Home purchase loan applications reach the maximum of 11 years

An index shows another increase in mortgage loan applications during the second week of June 2020 (iStock)

Homebuyers have not been so busy searching financing in more than a decade.

A tracking index of mortgage applications to purchase single-family homes increased 4 percent, seasonally adjusted, last week from the first week of June.

Although the Mortgage Bankers Association metric has been posting gains for nine consecutive weeks, the volume of purchase applications last week was the highest since 2009.

“The housing market continues to see the release of unrealized pent-up demand from early this spring, as well as a gradual improvement in consumer confidence,” said Joel Kan, MBA executive leading industry forecasts, it’s a statement.

The organization’s index tracking apps for refinancing also increased, 10 percent last week, and 106 percent year-over-year. The increase marked the second consecutive weekly gain for refinancing activity. Before the first week of June, refinance applications had dropped every week for nearly two months.

Kan attributed the upward trend to mortgage rates hitting a record low in the MBA survey last week.

The interest rate for the average 30-year mortgage of $ 510,400 or less fell to 3.30 percent, down from 3.38 percent the previous week. Average rates on jumbo mortgages plunged to 3.67 percent from 3.70 percent.

Overall mortgage loan applications were up 8 percent compared to the first week of June, when the MBA index, which tracks 75 percent of the US mortgage market. 9 percent increase after weeks without growth.

MBA estimated that 672,000 new, seasonally-adjusted single-family homes were sold in May, based on data from its monthly survey of homebuilder loan application data.

Kan called it another indicator of the housing market’s recovery as restrictions introduced to curb Covid-19 are lifted.

“We expect to see additional near-term strength in the coming months from the resumption of delayed sales activity caused by social distancing and stay-at-home requests during March and April,” Kan continued.

By the end of May, Khan had sung a more cautious tune, warning that home buying could be hampered in the “coming months” by high unemployment rates and low housing supply.

Write Erin Hudson at [email protected]