Home mortgage applications increased 1.1% from a wk ago, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey.
The Market Composite Index, a measure of mortgage loan application volume, increased 1.1% on a seasonally adjusted basis from 1 wk earlier.
The Refinance Index increased 1% from the prior wk and was 105% higher than the same wk a yr ago. The seasonally adjusted Purchase Index increased 2% from 1 wk earlier.
“US Treasury rates stayed low last week, in part due to uncertainty over the prospects of additional pandemic-related government stimulus, as well as concerns about the continued rise in COVID-19 cases across the country. Mortgage rates as a result fell to another survey low, with the 30-year fixed mortgage rate dropping five basis points to 2.85%,” said MBA’s Associate Vice President of Economic and Industry Forecasting. “Homeowners once again acted on the decline in rates, with refinance activity rising for the second straight week and up 105% from a year ago.”
He added “The ongoing strength in the housing market has carried into December. Applications to buy a home increased for the fourth time in five weeks, as both conventional and government segments of the market saw gains. Government purchase applications rose for the sixth straight week to the highest level since June – perhaps a sign that more first-time buyers are entering the market.”
The refinance share of mortgage activity increased to 72.7% of total applications from 72.0% the prior wk. The ARM (adjustable-rate mortgage) share of activity increased to 1.8% of total applications.
The average contract interest rate for 30-yr fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to a survey low of 2.85 from 2.90%.
“Yes, real estate is hot and should continue well into 2021, especially as a hedge against inflation. Americans still believe in owning a home as a key element of their investment portfolio and inheritance responsibilities to their children.
“The credit here must go to Trump for this is the effect of his tax cuts, the COVID-19 vaccine, low mortgage rates and the declining dollar based on its effect on exports – all employment drivers building Consumer Confidence and more consumer monetary liquidity. Added to this will be the current demand for suburban living.
“However, if Biden fulfills his promises for immigration changes, increased taxes, changes in the the Fed’s monetary policies plus tariffs reductions, this could have an adverse effect on employment plus the Consumer Confidence Index, both of which are strong contributors for real estate investment and demand.” notes renowned economist Bruce WD Barren.
Looking Ahead: Housing Starts and Building Permits for November will be reported Thursday.
Have a healthy day, Keep the Faith!