Not even super-low mortgage rates can counter the devastating impact of the coronavirus pandemic on the housing and mortgage markets.
The Mortgage Bankers Association reports that mortgage application volume fell 17.9% during the week ended April 3.
Applications for refinances decreased 19% compared with the previous week while applications for purchases plummeted 12%, according to the MBA’s Weekly Applications Survey.
Despite the week-over-week drop, applications for refinances remained 144% higher compared with the same week one year ago.
Applications for purchases were down 33% compared with a year ago.
On an unadjusted basis, total volume decreased 18% compared with the previous week.
“Economic weakness and the surge in unemployment continues to weigh heavily on the housing market,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Purchase activity declined again, with the index dropping to its lowest level since 2015 and now down 33 percent compared to a year ago. With much less liquidity and tighter credit in the jumbo market, average loan sizes declined, and mortgage rates for jumbo loans increased to a high last seen in January.
“Given the ongoing rate volatility, along with the persistent lack of liquidity in certain sectors of the MBS market, we expect to see continued weekly swings in refinance activity,” Kan adds.
The refinance share of mortgage activity decreased to 74.2% percent of total applications, down from 75.9% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 3.3% of total applications.
For the week ended April 3, the average rate for a 30-year fixed-rate mortgage was 3.49%, up from 3.47% the previous week, according to the MBA’s data.