Last week, purchase mortgage applications increased 6% nationally, up for the third week in a row. Versus a year ago, purchase applications are down 19%, but climbing back, demand now within 15% of pre-shutdown levels.
Fannie Mae projects low mortgage rates will send refis through the roof, to $1.4 trillion in 2020, the most since 2012. The extra money lower monthly payments will put in homeowners’ pockets should do a lot to restore economic growth.
The chief economist for a national online listing site says the housing market bottom is “pretty much now,” as new listings head upward, adding: “We’re seeing several signs that there is still a good amount of demand for housing.”
REVIEW OF LAST WEEK
ROLLER COASTER UP… The current stock market thrill ride ended the week on a climb, as the tech-y Nasdaq recovered all its losses for the year on the very day of the worst jobs report in American history.
April saw the loss of 20.5 million Nonfarm Payrolls, sending the Unemployment Rate to 14.7%. This was the first entire month of the shutdown but–good news–nearly 80% of the layoffs were reported as “temporary.”
Reopening the economy has its challenges, yet investors held to the view things will get better. More companies talked about reopening plans reporting business conditions are stabilizing, and even improving.
The week ended with the Dow UP 2.6%, to 24,331; the S&P 500 UP 3.5%, to 2,930; and the Nasdaq UP 6.0%, to 9,121.
Treasuries retreated, but mortgage bonds hung in. The UMBS 4.0% ended UP 0.08, to $106.67. The national average 30-year fixed mortgage rate ticked up slightly from last week’s all-time low in Freddie Mac’s Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?… In Q1 this year, a little over one quarter of the 57.4 million mortgaged homes in the U.S. were equity rich, meaning their mortgage balances amounted to less than half their estimated market value.