Acknowledging that mortgage activity was significantly lower at the end of April than it was the prior year, the Mortgage Bankers Association believes there is “pent-up demand for homebuying” as officials begin the process of opening the economy following the COVID-19 pandemic.
MBA’s Weekly Mortgage Applications Survey found applications increased just 0.1% as of May 1, while the Refinance Index decreased 2%. The Purchase Index, although down 19% from the end of April 2019, was up 6% in the week ending May 1.
“Purchase volume increased for the third week in a row, led by strong growth in Arizona, Texas and California. Although purchase activity remains almost 19% below year-ago levels, this annualized deficit has decreased as more states reopen amidst the apparent, pent-up demand for homebuying,” Mike Fratantoni, MBA’s senior vice president and chief economist, said in a statement.
The pandemic forced many consumers to hit pause on big-ticket purchases, but research from the National Association of Realtors indicates home sellers are confident about demand for their homes once stay-at-home orders are lifted.
NAR found 76% of home sellers haven’t reduced listing prices, and 73% are prepared to sell their homes when the economy opens up again.
“Plenty of buyers also appear ready to take advantage of record-low mortgage rates and the stability that comes with these locked-in monthly payments into future years,” Lawrence Yun, NAR’s chief economist, said in a statement.
The pandemic has forced consumers to look at homes in new ways. NAR found 5% of its members have clients who are now looking at suburban locations over urban properties, and 13% have changed their priorities about features their new home should have. The most common is a home office, but consumers also want a yard “for exercising or growing food,” and enough room for their families.