Mortgage demand for applications increased for the second week in a row with a 1.2% gain for the week ending May 14, 2021, according to the Mortgage Bankers Association (MBA)
- REFINANCE: Refi’s were the cause of the upward movement with a 4% increase from the previous week. However, demand was 2% lower than the same week one year ago.
- PURCHASE: Purchase demand was down 4% compared with the previous week. However, volume was 2% higher than the same week one year ago.
Low inventory is clearly putting downward pressure on purchase demand and is therefore putting upward pressure on home prices. Average purchase loan balances hit $411,400, this is the highest since February.
Joel Kan, MBA economist, said in a statement, “There continues to be strong demand for buying a home, but persistent supply shortages are constraining purchase activity, and building material shortages and higher costs are making it more difficult to increase supply.”