Coronavirus causes mortgage applications to plunge
30-year fixed mortgage rate last week reached its highest level since mid-January
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The coronavirus outbreak has potential home buyers staying out of the mortgage market for now as applications for mortgages and refinances plunged in the past week.
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Applications fell 29.4 percent and the refinance index decreased 34 percent, according to the Mortgage Bankers Association weekly survey.
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Last week, the 30-year fixed mortgage rate reached its highest level since mid-January.
“Home purchase applications were notably impacted by rising rates and the widespread economic disruption and uncertainty over household employment and incomes," said Joel Kan of the Mortgage Bankers Association. "Potential homebuyers 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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The refinance share of mortgage activity decreased to 69.3 percent of total applications from 74.5 percent the previous week.
The average contract interest rate for a 30-year fixed-rate mortgage increased to 3.82 percent from 3.74 percent.
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The survey covers over 75 percent of all U.S. retail residential mortgage applications and has been conducted weekly since 1990.