The Mortgage Bankers Association reported This Week in Real Estate that home purchase applications realized, for the eighth consecutive week, an increase in activity and last week marked the highest level since January. Below are a few newsworthy events from the second week of June that influence our business:
Home Purchasing Climbs For Eighth Straight Week. The latest round of the Mortgage Bankers Association’s (MBA) Weekly Application Survey showed an increase in its benchmark Market Composite Index for the week ending on June 5 by 9.3% from the previous week on a seasonally adjusted basis. Home purchasing continued its climb, posting gains for the eighth straight week, increasing from the previous week by 5.3. This week’s purchasing activity marked the highest level since January.
Mortgage Rates Set New Record Low, Falling Below 3%. Barely a week ago it looked like mortgage rates were finally breaking higher, but in a sudden reversal, they just set a new record low. The average rate on the popular 30-year fixed mortgage hit 2.97% Thursday, according to Mortgage News Daily, as the stock market sold off and investors rushed to the relative safety of the bond market. Mortgage rates loosely follow the yield on the 10-year U.S. Treasury. For top-tier borrowers, some lenders were quoting as low as 2.75%. Lower-tier borrowers would see higher rates. Interest rates also benefited from an announcement by the Federal Reserve on Wednesday that it would continue buying mortgage-backed bonds. That will keep liquidity in the lending market.
Borrowers Gained Over $6 Trillion in Home Equity From Q1 2010 to Q1 2020. The amount of equity in mortgaged real estate increased by $590 billion in the first quarter of 2020 from the first quarter of 2019, an annual increase of 6.5%, according to the latest CoreLogic Equity Report. Borrower equity hit a new high in the first quarter of 2020, and borrowers have gained over $6 trillion in equity in the last 10 years.