Mortgage Purchases Signal Housing Recovery May Be Here

20 May 2020

Mortgage Purchases Signal Housing Recovery May Be Here

Inman News

Odeta Kushi, the deputy chief economist at First American, said the increase in mortgage applications is part of a long-term trend, not simply pent-up demand.

The housing market seems to have calmed back to pre-pandemic levels, at least for now, according to the latest mortgage data released Wednesday by the Mortgage Bankers Association (MBA).

The seasonally adjusted mortgage purchase index climbed 6 percent from the previous week and is only 1.5 percent lower than it was at this time last year. It’s not simply pent up demand, but rather part of a long-term trend, according to Odeta Kushi, the deputy chief economist at First American.

“Housing fundamentals were strong going into this health crisis, and riding a demographic tailwind that is unlikely to go away,” Kushi posted on Twitter.

MBA’s overall market composite index — a measure of mortgage loan application volume — decreased 2.6 percent from the week prior, likely due to a 6 percent week-over-week drop in mortgage refinance applications. Despite the week-over-week drop, the mortgage refinance applications index was up 160 percent year-over-year, due to historically low interest rates.