Number Talk: Application activity on the rise

Between buyer demand and a raging refinance market, application volume was up 4.1% last week, and refinance applications were up 5% for the week and 122% higher than a year ago, according to the Mortgage Bankers Association.

Mortgage lending is set to reach $3.14 trillion this year — the highest total since 2003 — as the annual average rate for a 30-year fixed home loan falls to a record low of 3.2%. Next year, the average rate will likely fall to 2.8%, the lowest ever recorded!

Meanwhile, the Federal Reserve is set to purchase $40 billion a month in mortgage-backed securities. This is coupled with expectations that “margins” – meaning the difference in yields for 10-year Treasury and mortgage bonds – will continue to shrink as the lending industry adjusts to doing business in the age of COVID-19.

Number Talk: Reasons to Buy

COVID-19 may have us all stuck at home, but that’s not keeping potential buyers on the couch. In fact, a study from Lending Tree found that 53% of homebuyers are more likely to purchase a home the next year — precisely because of the coronavirus. Among the top motivations:

1. Taking advantage of record-low mortgage rates (67%).

2. Ability to save a larger down payment due to reduced spending (32%).

See more in the chart below.

Number Talk: Update from CA Realtors

California Association of Realtors 2020 President Jeanne Radsick recently addressed the impacts of the public health crisis on the real estate market:

As expected, California home sales experienced the worst month-to-month sales decline in more than four decades as the coronavirus pandemic kept both buyers and sellers on the sidelines. While some economic activity will resume as the state gradually reopens, the housing market is expected to remain sluggish for the next couple of months.

Number Talk: Mortgage Interest Rates

Thinking about buying a house or refinancing one you already own? Short-term and long-term interest rates have hit all-time lows. According to Freddie Mac, the weekly average on a 30-year mortgage was 3.23% on April 30. The same rate was at 4.94% as recently as November 2018.