Blog posted On March 27, 2020
Mortgage rates continued to experience some volatility this week, but despite that remain historically low. New home sales dropped in February, after touching a 13-year high in January. Both new purchase and refinance mortgage application submissions declined. The Federal Housing Finance Agency (FHFA) house price index appreciated.
New home sales or the sales of newly constructed homes fell 4.4% month-over-month to a seasonally adjusted annual rate of 765,000. However, sales are up 14.3% from February 2019 to February 2020. While the West and Midwest saw respective 17% and 7% declines, the Northeast and the South had respective 39% and 1% jumps. March’s data will likely be influenced by the coronavirus (Covid-19) as the housing market adapts to virtual showings and other changes.
The Mortgage Bankers Association (MBA) weekly mortgage application survey declined for the week ending 3/20. New purchase mortgage application submissions declined 15% and refinance applications declined 34%, for a composite decrease of 29.4%. The decline was likely influenced by the global economic slowdown causing mortgage rates to trend slightly higher. Joel Kan, MBA’s associate vice president of economic and industry forecasting, explained, “several factors pushed rates higher, including increased secondary market volatility, lenders grappling with capacity issues and backlogs in their pipelines, and remote work staffing challenges.”
The FHFA house price index appreciated 5.2% year-over-year and 0.3% from December to January, as expected. Dr. Lynn Fisher, Deputy Director of Research and Statistics at FHFA, warned, “transactions in January were unlikely to reflect much, if any, influence from the Covid-19 outbreak.”
Coronavirus (Covid-19)-related shutdowns and economic slowdown has impacted all industries nationwide and the housing market will also likely adapt to current shelter-in-place restrictions. Our mobile app makes it easy to get preapproved for a new purchase or refinance home loan from the safety of your home. If you have any other mortgage-related questions, please let us know.