Eighth Straight Week of a Rise in Home Purchasing

The housing market is up and running even through the pandemic. According to the Mortgage Bankers Association’s (MBA) Weekly Application Survey, there was an increase by 9.3% in the Market Composite Index for the week ending on June 5 from the week before on a seasonally adjusted basis. This was the highest level of purchasing activity since January.

The Mortgage Bankers Association’s (MBA) Weekly Applications Survey has been the leading indicator of the housing and mortgage finance activity since 1990. The survey’s purpose is to obtain and provide related information to mortgage originators, servicers, investors, other participants in the housing market and economists and others interested in the current pace of economic activity.

The Market Composite Index is a measure of the volume of mortgage loan applications. The index covers all mortgage applications that have occurred during the week. The data includes conventional and government applications, all fixed-rate mortgages (FRMs) and all adjustable-rate mortgages (ARMs), whether for a purchase or to refinance.

The Mortgage Bankers Association’s 30-year fixed-rate mortgage rate went up one basis point from last week’s record low. Last week reported a historic low of 3.3% which was 8 basis points from the previous week. This has not slowed purchase applications which are still increasing after nine consecutive weeks. In fact, this marks the highest level of purchase applications in over eleven years.

Refinancing has been slower but has taken a sharp turn this week. The report detailed an 11.4% increase from last week’s activity.  According to eyeonhousing.org, “With the Federal Reserve’s recent announcement of an accommodative monetary stance in order to aid recovery efforts, a low-interest-rate environment is bound to continue for the short-term, effectively benefiting housing demand.”

People are seeing the benefit in homeownership as home purchasing continues to rise for the eighth straight week increasing 5.3% from the week before.

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