Weekly mortgage applications have taken a drastic 29% hit as COVID-19 show no signs of letting up anytime soon. The combination of increased interest rates, a struggling economy and some homeowners and prospective homebuyers finding themselves unemployed as a result of the coronavirus pandemic, there is a clear slowdown happening in the industry.
"The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.82% from 3.74%, with points decreasing to 0.35 from 0.37 (including the origination fee) for loans with a 20% down payment," according to CNBC. "That is the highest level since mid-January."
With rates looking as if they would be continuing the downward trend, secondary market volatility and lenders struggling to deal with backlogs and remotely working served as reasons why they simply could not dip any lower, according Joel Kan, Mortgage Bankers Association's associate vice president of economic and industry forecasting.
There is a small sliver of good news on the refinance side. "Applications to refinance a home loan, which had been surging dramatically in the last month, fell 34% for the week but were still 195% higher than a year ago, when rates were 63 basis points higher," according to the report.
To learn more about the drop in weekly mortgage applications, click here.