'Pent-Up Demand' Drives Growth in Homebuyer Interest for Third Straight Week

May 7, 2020
Aerial view of suburban homes
By trongnguyen

After spending so much time at home, some Americans are itching to move into a new one. “Pent-up demand for homebuying” drove buyer interest up for the third straight week, according to the Mortgage Bankers Association. The weekly volume of applications for loans to buy a home rose 6 percent on a seasonally-adjusted basis for the week ending May 1, the third straight week-over-week increase. This comes after homebuyers retreated in the middle of March and beginning of April due to the uncertainty surrounding the coronavirus. A hazy future still lies ahead as states reopen, but the uptick in loans for purchase is a positive sign.

A weekly gauge of home buyer interest ticked up for the third week in a row—a sign of “pent-up demand for home buying,” according to the organization that administers the survey.

The Mortgage Bankers Association’s Purchase Index, which measures the weekly volume of applications for loans to buy a home, rose 6% on a seasonally-adjusted basis and 7% on an unadjusted basis for the week ending May 1. In a news release, MBA chief economist Mike Fratantoni credited that week-over-week increase to “strong growth in Arizona, Texas and California,” which posted increases of 11%, 10.3% and 10.1%, respectively.

With state lockdowns only beginning to be eased, much is still unknown about how an economic recovery from the coronavirus crisis will take shape. But a third week-over-week increase in loan applications is a positive sign for the housing market. The survey is a regular pulse-check of buyer interest in residential real estate—and for much of March and April it was falling.

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