2020 has been good to the home mortgage industry so far. According to an article published last week by CNBC.com, “Total mortgage application volume surged 30.2% last week from the previous week”. Mortgage companies not only saw an influx of refinance applications, but also an unseasonably high number of home purchase applications.
Interest rates dropped to the lowest level since fall of 2019 and, as a result, refinance applications surged. In fact, according to the article written by Diana Olick, “Those applications jumped 43% for the week and were 109% higher than a year ago. The refinance share of mortgage activity increased to 62.9% of total applications from 58.9% the previous week.”
However, home purchase applications pulled in some impressive numbers, especially considering the housing market typically doesn’t pick up until February. The volume of home purchase applications came in at the highest tally since October of 2009.
Unfortunately, this high demand for homes is met with a very low supply of homes. With a continued supply and demand mismatch, prices could soar and leave some prospective home buyers priced out of the market.
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Photo Credit: Gerd Altmann