Mortgage applications slump 24% to the lowest in more than 3 years as coronavirus hits the housing market

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  • Mortgage applications to buy a home fell 11% last week and 24% from a year ago, according to a survey released Wednesday by the Mortgage Bankers Association.
  • “The bleaker economic outlook, along with the first wave of realised job losses reported in last week’s unemployment claims numbers, likely caused potential homebuyers to pull back,” said Joel Kan, the associate vice president of economic and industry forecasting at MBA.
  • While the entire US is grappling with the coronavirus pandemic and fallout due to social distancing measures, the housing market has been hit hardest in New York, California, and Washington state, where mortgage applications are down more than 30% on the year.
  • Read more on Business Insider.

Potential homebuyers are backing off the housing market amid the coronavirus pandemic.

Mortgage applications to buy a home fell 11% last week and 24% from a year ago, according to a survey released Wednesday by the Mortgage Bankers Association.

“The bleaker economic outlook, along with the first wave of realised job losses reported in last week’s unemployment claims numbers, likely caused potential homebuyers to pull back,” said Joel Kan, the associate vice president of economic and industry forecasting at MBA. “Purchase applications were down over 10 per cent, and after double-digit annual growth to start 2020, activity has fallen off last year’s pace for two straight weeks.”

At the same time, the refinance rate spiked 26% from the previous week and was up 168% on the year, bringing the composite index up 15.3%. The refinance share of mortgage activity jumped to 75.9% from 69.3% last week.

Mortgage rates and applications have whiplashed as the coronavirus pandemic brings increased volatility to financial markets and the US economy. While interest rates are at historic lows, driving refinancing applications, consumer confidence is slipping as social-distancing measures to curb the spread of COVID-19 persist and data starts to show the vast impact of the practice on the US economy.


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Last week, weekly jobless claims spiked to 3.3 million, a staggering all-time high, as coronavirus layoffs began to hit the job market. Over the weekend, President Donald Trump extended federal social-distancing guidelines through April 30.

“Buyer and seller traffic – and ultimately home purchases – will also likely be slowed this spring by the restrictions ordered in several states on in-person activities,” said Kan.

While the entire country is seeing the effects of the coronavirus pandemic, so far housing market data shows that certain states have been hit harder. Purchase applications in New York, California, and Washington state all fell more than 30% on the year for the week ending March 27.

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