Housing strengthens while mortgage forbearance continues decline
The number of mortgages in forbearance programs fell for the sixth week in a row to its lowest level in two months as of July 12, according to the Mortgage Bankers Association.
The state of play: MBA’s estimates show 3.9 million homeowners now in forbearance plans. Demand also has risen significantly as mortgage application volume jumped 4.1% last week with applications to purchase a home 19% higher than a year ago — the ninth straight week of annual gains.
Why it matters: The numbers show the continued strength of the housing market, as mortgages have jumped and applications for the government's payment suspension program have tailed off since May.
- It also highlights a growing divide between the wealthy and other Americans.
What they're saying: “Almost half of borrowers remaining in forbearance are now in an extension of the original term, while the remainder are in their initial forbearance plan," said Mike Fratantoni, MBA’s chief economist.
- "The pace of new forbearance requests remains quite low compared to earlier in the crisis, but we are watching carefully for any increases due to either the pick-up in COVID-19 cases or the cessation of enhanced unemployment insurance benefits at the end of this month.”
Of note: MBA’s latest Forbearance and Call Volume Survey covers the period from July 6 through July 12 and represents 75% of the first-mortgage servicing market (37.3 million loans).