Understandably, there aren’t a whole lot of folks who would want to go home shopping and/or apply for a mortgage in coastal Texas or south Florida as a major hurricane was making landfall. Nor would they want to do so in the days that followed the storm.
But considering that total mortgage application volume jumped nearly 10%, nationwide, during the week ended Sept. 1, compared with the week before, it’s interesting to ask: Just how much did Hurricanes Harvey and Irma have on mortgage application volume in Texas and Florida?
Obviously, there is a larger effort going on to clean up after the two storms and get peoples’ lives back on track. But according to a recent report from the Mortgage Bankers Association (MBA), mortgage application volume dropped about 15% during the week ended Sept. 1, for the state of Texas, after Harvey first made landfall on Aug. 25.
In the MBA’s “Chart of the Week” report, authors Lynn Fisher, vice president of research and economics for the MBA, and Joel Kan, associate vice president, industry surveys and forecasts for the MBA, point out that “Harvey dumped rain on Houston and the surrounding coastal areas for four days.” The fact that the impact on application volume was not worse was perhaps due to an uptick in activity elsewhere in the state.
“In the following week which included Labor Day, applications rebounded to a 3.5 percent year over year gain on the back of presumably strong activity elsewhere in the state,” they write in the report. “The state had experienced strong year over year growth in purchase mortgage activity prior to the hurricane.”
Irma, which came two weeks after Harvey, caused application volume to drop by more than 25% before it even hit the mainland.
As per the report: “The storms differed in a variety of ways. Harvey was unprecedented in its rainfall for the coast of Texas and caused flooding that affected up to 30 percent of the state’s population, as measured by the population of counties in FEMA individual assistance areas. Irma brought high winds and flooding to a state that is much more prepared (and more widely insured) for such perils, but it affected nearly 90 percent of the state’s population, and more than twice the population of Harvey affected counties in Texas, as Irma engulfed the entire state in her path.”