Homebuying activity is increasing as restrictions began to be lifted in various states, the latest MBA report revealed.
The U.S. housing market is showing signs of recovery as homebuyers resume their home searching activities thanks to the easing of lockdown measures happening in many states, MBA Associate Vice President of Economic and Industry Forecasting, Joel Khan said.
States that have relaxed some of its restrictions include Alabama, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Mississippi, Missouri, Montana, New Hampshire, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, and West Virginia.
For the week ending on May 22, 2020, the seasonally adjusted Market Composite Index rose 2.7 percent from one week prior, while the unadjusted index rose 3 percent, data from the Mortgage Bankers Association Weekly Applications Survey said.
Last week, the purchase applications surged 54 percent since early April 2020. According to the survey, purchase applications rose nine percent; it is the sixth consecutive weekly jump for purchase applications. The seasonally adjusted Purchase Index also increased 9 percent from one week before, while the unadjusted Index increased 7 percent as compared to the week before, which is 9 percent higher from the same period last year.
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The purchase loan amount also saw a steady rise in recent weeks, Mr. Kan added, which brought it to its highest level since the middle of March. Refinance activity did not move much but is still 176 percent higher as compared to last year.
Refinance Index dropped 0.2 percent from one week before with conventional refinance applications rising 2 percent and government refinancing sliding almost 7 percent.
At the state level, the purchase applications non-seasonally adjusted, week-over-week percent change from New York, California, and New York for the week ending May 22, 2020, are as follows: NY (19.7%), CA (11.6%), WA (3.5%).
Additionally, the non-seasonally adjusted, year-over-year percent change of purchase applications from New York, California, and New York for the week ending May 22, 2020, are as follows: NY (-16.9%), CA (-1.7%), WA (-23.1%).
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Meanwhile, the FHA share of the total applications dropped to 11.2 percent from 11.5 percent level the week before. The VA share, on the other hand, decreased to 12.4 percent from 13.4 percent, and the USDA share slid to 0.6 percent from 0.7 percent the week before.
In April, existing-home sales declined year-over-year by 17.2 percent to a seasonally adjusted rate of 4.33 million, also down 17.8 percent from March, the National Association of Realtors reported. Home prices remained strong, however, with the existing-home median price rising 7.4 percent from one year before to $286,800.
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Furthermore, the REALTORS Confidence Index indicated that first-time homebuyers took 36 percent of the market share - an increase from 32 percent in April 2019 - as investors remained on the sidelines due to the coronavirus pandemic.
The MBA Weekly Applications Survey is being conducted weekly, covering more than 75 percent of all retail, residential mortgage applications in the U.S.
The MBA Purchase Index measures the home loan applications and is considered a leading indicator of the U.S. housing market. The MBA Purchase Index guides economists and homebuilders in forecasting new and existing-homes sales.
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