Home Purchasing Climbs for Eighth Straight Week

The latest round of the Mortgage Bankers Association’s (MBA) Weekly Application Survey showed an increase in its benchmark Market Composite Index for the week ending on June 5 by 9.3% from the previous week on a seasonally adjusted basis.

Refinancing activity, which had been showing week-to-week declines since the second week of April, showed a sharp turnaround this week and posted an 11.4% gain compared to the previous week’s activity. Home purchasing continued its climb, posting gains for the eighth straight week, increasing from the previous week by 5.3%.

This week’s purchasing activity marked the highest level since January. Meanwhile, MBA’s 30-year fixed-rate mortgage rate inched up one basis point from the record low reached last week of 3.37%. This suggests a cautionary stance among many lenders as the economy prepares for a relatively more V-shaped recovery from the COVID-19-induced slump.

As shown in the above figure, the declines in refinancing and purchasing activities’ year-over-year gains from the previous week, while nonetheless positive, are indicative of the uncertainty that the housing market faces as many businesses reopen across the nation.

by NAHB Eye On Housing