US housing market showing strong demand
By SCOTT REEVES in New York | chinadaily.com.cn | Updated: 2020-06-19 04:50
The US housing market is showing strong demand as mortgage applications, purchase prices and number of sales for the week ending June 8 increased.
The Mortgage Bankers Association reported Thursday that mortgage applications were up 8 percent for the week ending June 12 compared with one week earlier. Purchase prices and the number of sales also increased, the Washington-based trade association said.
But the National Association of Realtors, a Chicago-based trade organization said there isn't enough supply to meet demand.
The increase in applications is one indicator of an economic rebound following the government-ordered economic shutdown to curb spread of the coronavirus.
"Purchase applications increased to the highest level in over 11 years and for the ninth consecutive week," Joel Kan, MBA's associate vice-president of economic and industry forecasting, said in a statement. "The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a graduate improvement in consumer confidence. Mortgage rates dropped to another record low."
"Mortgage rates dropped to another record low, leading to a 10 percent surge in refinance applications," Kan said.
Refinancing continues to support households' finances, as homeowners who refinance are able to gain savings on their monthly mortgage payments in a still-uncertain period of the economic recovery."
The Federal Reserve Bank cut interest rates to 0-0.25 percent as part of its effort to stimulate the economy during the downturn. Low interest rates are intended to encourage borrowing and consumer spending.
The average interest rate for a 30-year fixed rate mortgage with balances of $510,400 or less fell to 3.30 percent from 3.38 percent – the lowest level in the history of MBA's survey.
The average rate for jumbo mortgages, or those in excess of $510,400, decreased to 3.67 percent from 3.70 during the prior week, the trade association said.
If demand remains strong, price increases are likely to continue because supply is limited.
