Typically, spring homebuying season starts in earnest as the calendar ticks toward March, but homebuyers are seemingly getting an earlier start this year, perhaps driven into the market by low mortgage rates.
Now, a new report from the Mortgage Bankers Association shows that spring homebuying season officially began in January this year.
According to the MBA, January 2020 was the strongest January for purchase mortgage applications in 11 years.
Applying for a mortgage is considered the first official step in the homebuying process, so applications being up in January to an 11-year high indicates that buyers are ready and willing to buy now.
And the increase in mortgage applications has continued into February.
The report also showed that mortgage applications rose 1.1% in the last week from one week prior, marking the third consecutive week of increases, according to a seasonally adjusted index from the MBA.
“The mortgage market continues to be active in early 2020, as applications increased for the third straight week,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Rates also rose, but still remained close to their lowest levels since October 2016,”
And people aren’t just moving to buy houses either. They’re also continuing to refinance at record rates.
According to the MBA, the Refinance Index climbed 5% to its highest level since June 2013, Kan said. Compared with a year earlier, it was a whopping 207% higher this year.
The refinance share of mortgage activity increased to 65.5% of all mortgage applications compared to last week’s 64.5%, the MBA report said.
The Purchase Index declined by 6% this week, but activity was still up almost 16% percent from a year ago, Kan said.
“Last month was the strongest January for purchase applications since 2009, which is perhaps a sign that mild weather brought out prospective buyers earlier than normal,” Kan said. “Despite a decline last week, purchase activity was still up almost 16% from a year ago.”
