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Coronavirus sparks dip in applications to buy homes and refinance

In what may be the first significant sign that coronavirus is chilling the spring homebuying season, applications to refinance or buy a home plunged last week.

Mortgage applications overall dropped 29.4% as compared to a week earlier, according to the Mortgage Bankers Association.

The dip was due in part to rising interest rates. But worries about COVID-19’s impact on the economy also had an impact.

States hit particularly hard by the coronavirus pandemic experienced a notably steep drop in applications. California saw purchase applications drop 23% last week as compared to the week before. New York’s volume plunged 35% and applications in Washington dropped 17%.

Person holding a set of keys with a house in the background

“Home purchase applications were notably impacted by rising rates and the widespread economic disruption and uncertainty over household employment and incomes,’’ Joel Kan, MBA’s associate vice president of economic and industry forecasting said in the statement announcing the survey’s results. “Potential home buyers might continue to hold off on buying until there is a slowdown in the spread of the coronavirus and more clarity on the economic outlook.”

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