The mortgage market posted $2.173 trillion in originations in 2019, the best year for the industry since 2006.
Don’t look now, but in the middle of a pandemic, the mortgage industry is outpacing 2019.
The latest mortgage applications data from the Mortgage Bankers Association (MBA) shows both purchase and refinance applications above the same week a year ago. MBA reported that the purchase applications were 21 percent higher year-over-year while refinances applications were 106 percent higher, spurred on by another record-low week in mortgage rates.
“Purchase applications increased to the highest level in over 11 years and for the ninth consecutive week. The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a gradual improvement in consumer confidence,” said Joel Kan, MBA associate vice president of economic and industry forecasting, in a press release. “Mortgage rates dropped to another record low in MBA’s survey, leading to a 10 percent surge in refinance applications. Refinancing continues to support households’ finances, as homeowners who refinance are able to gain savings on their monthly mortgage payments in a still-uncertain period of the economic recovery.”
The real star right now is the level of purchase applications. The most recent data marked the fourth week in a row in which purchase applications rose from the previous year. On June 10, applications were up 13 percent from a year ago, on June 3 they were up 18 percent and on May 27 they were 9 percent higher.
MBA reported 30-year fixed-rate mortgages dropping to 3.3 percent, the lowest level in its survey history. Freddie Mac reported its survey found 30-year rates at 3.13 percent, the lowest in its survey history, which dates back to 1971.
“While the rebound in the economy is uneven, one segment that is exhibiting strength is the housing market. Purchase demand activity is up over 20 percent from a year ago, the highest since January 2009,” Freddie Mac Chief Economist Sam Khater said in a release. “Mortgage rates have hit another record low due to declining inflationary pressures, putting many homebuyers in the buying mood. However, it will be difficult to sustain the momentum in demand, as unsold inventory was at near record lows coming into the pandemic and it has only dropped since then.”
Meanwhile, momentum does not appear to be slowing. Mortgage News Daily found 30-year rates between 2.94 percent and 3.01 percent from June 11-18.