Mortgage applicants are jumping back into the housing market in unexpected numbers thanks to extremely favorable rates. Mortgage applications to purchase a home rose 9% last week according to the Mortgage Bankers Association. This caps the sixth consecutive week of gains and a 54% increase since early April.
While new applications have been on a rise, refinancing fell .2% for the week, despite being up 176%. Near record-low mortgage rates have really buyers. The average interest rate for 30-year fixed-rate mortgages of $510,400 or less increased to 3.42% from 3.41%. Points, including the origination fee, remained unchanged at 0.33 for loans with a 20% down payment.
Mortgage rates are expected to remain low and possibly drop even lower in the coming months.
“The home purchase market continued its path to recovery as various states reopen, leading to more buyers resuming their home search,” said Joel Kan, an MBA economist. “Additionally, the purchase loan amount has increased steadily in recent weeks and is now at its highest level since mid-March.”