One segment of the market, at least, has proved more resilient than many feared early on in the crisis.
Efforts to calm lenders’ fears about coronavirus-related forbearance may not offset tightening standards, and the FHA is less likely to boost volume than it was during the financial crisis.
The nation's largest bank is temporarily reducing its exposure to the mortgage market amid rising unemployment and estimates that home prices could drop by 10%.
There was a nearly 30% week-to-week decline in loan applications as Americans reacted to the uncertainty, both economic and medical, from the spread of COVID-19, according to the Mortgage Bankers Association.
Mortgage applications to purchase new homes took a small step back in February from record levels during the previous month, but further positive momentum could be blunted by the coronavirus.
Paradoxically, mortgage rates actually increased this past week, even as the 10-year Treasury yield plumbed new depths, likely because lenders are too busy to handle the influx of applications.
The Mortgage Bankers Association raised its refinance projections for 2020, a move precipitated by an application volume increase of 55.4% from one week earlier.
Mortgage rates hit their lowest point since Freddie Mac began tracking this data in 1971, as the 10-year Treasury yield fell below 1% after the Federal Open Market Committee's surprise short-term rate cut.
Mortgage application volume increased 15.1% from one week earlier, and with interest rates still falling, even higher refinance demand is probable in the short term, according to the Mortgage Bankers Association.
Mortgage application volume rose last week, but with the 10-year Treasury yield tanking in recent days, growth in refinancings for the current period is quite likely, according to the Mortgage Bankers Association.