Coronavirus layoffs hit housing market, mortgage applications plummet

The coronavirus pandemic has seen more than 10 million people file for unemployment benefits in the past two weeks

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Coronavirus has stalled demand for mortgages as unemployment numbers soar and potential buyers find themselves staying at home, adhering to local government guidelines.

Mortgage applications fell by 17.9 percent from the prior week, according to the latest survey from the Mortgage Bankers Association.

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The refinance index decreased 19 percent. The purchasing index dropped 12 percent.

“Mortgage applications fell last week, as economic weakness and the surge in unemployment continues to weigh heavily on the housing market," said Joel Kan, MBA's associate vice president of economic and industry forecasting.

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The latest weekly jobs report released last week showed 6.6 million Americans filed for unemployment benefits, as many businesses have had to close, putting employees out of work. That brings the two-week total to nearly 10 million.

"Given the ongoing rate volatility, along with the persistent lack of liquidity in certain sectors of the MBS market, we expect to see continued weekly swings in refinance activity,” added Kan.

The rate for a 30-year fixed-rate mortgages increased to 3.49 percent from 3.47 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.