Mortgage Demand Sees Atypical Year-Over-Year Surge of 40%

September 9, 2020
Person signing papers with house figurine in background
By JuanCi Studio

At this time of year, the housing market typically begins slowing with mortgage applications to purchase a home at single digit year-over-year increases. But just like everything else this year, it has been difficult to predict what the housing market will do. Mortgage applications to purchase a home are 40% higher than a year ago, according to CNBC. From the previous week, mortgage applications grew by 3%. Applications for refinancing a home loan also rose by 3% and were 60% higher than a year ago. Mortgage rates remain low, continuing to fuel the home buying demand.

Buyers are still getting significant incentive from low mortgage rates. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances up to $510,400 fell to 3.07% from  3.08%, with points remaining unchanged at 0.36, including the origination fee, for loans with a 20% down payment.

For the 15-year fixed, the rate declined to a record low of 2.62% on conventional loans.

“There continues to be resiliency in the purchase market,” said Joel Kan, an MBA economist. “The average loan size continued to increase, hitting a survey high at $368,600. Highlighting the strong overall demand for buying a home, conventional, VA and FHA purchase applications all increased last week.”

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