Demand For Home Loans Remains Strong
According to the Mortgage Bankers Association's Weekly Applications Survey, demand for loans to buy homes has started the year off strong and is now 17 percent higher than at the same time last year. The improvement comes after purchase activity increased 5 percent last week from the week before. Joel Kan, MBA's associate vice president of economic and industry forecasting, says low rates and a healthy job market are the main factors driving demand. “Mortgage applications continued their strong start to the year, as borrowers acted on the drop in mortgage rates last week,” Kan said. “Rates were driven lower by investors' increased concern about the economic impact from China's coronavirus outbreak, in addition to existing concerns over trade and other geopolitical risks ... Thanks to low rates and the healthy job market, purchase activity continues to run stronger than in 2019.” Survey results show average mortgage rates fell for 30-year fixed-rate loans with both conforming and jumbo balances, as well as 15-year fixed-rate loans. Rates for loans backed by the Federal Housing Administration, on the other hand, were up from one week earlier. The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.