Spring has sprung, and in just over a month it will be gone without the homebuying season ever taking off, thanks to the coronavirus. But as we head into the final stretch of spring, purchasing activity has started to climb with the Mortgage Bankers Association’s 30-year fixed-rate mortgage contract rate up by 4 basis points from the week before. Loosening restrictions and pent-up demand are rekindling the cooled market, according to the MBA. Though it’s too late to save the spring homebuying season, the last minute performance brings hope for the coming months.
Since its previous week’s reading, which also marked a record low in the series, the Mortgage Bankers Association’s 30-year fixed-rate mortgage contract rate edged up by 3 basis points to 3.43%. The Market Composite Index, measuring mortgage loan application volume for purchases and refinancings, increased by 0.3% on a seasonally adjusted basis from one week prior.
The MBA cites the release of pent-up housing demand from relaxed stay-at-home orders as the reason for the continued increase in Purchasing activity, indicated by the seasonally-adjusted increase of 11% in the Purchasing index from the prior week. In the absence of the virus-related lockdown measures, the market activity from spring homebuying season would clearly be greater, with increased traffic of prospective homeowners. The unadjusted Purchase index is reflective of this, being 10% lower than the same week one year ago.