U.S. Mortgage Applications Plunged Last Week by Most Since 2009

&copy Bloomberg. Buildings stand in the Lawrenceville neighborhood of Pittsburgh, Pennsylvania, U.S., on Wednesday, Jan. 22, 2020. It’s a sign of the times in Pittsburgh, where an influx of tech jobs is helping to push home prices in some neighborhoods to double or triple what they were ten years ago. As the real estate market heats up, wholesalers, house flippers, and other short-term investors are fishing for properties. Photographer: Michael Rayne Swensen/Bloomberg

(Bloomberg) — U.S. loan applications for buying and refinancing homes plunged last week by the most since the global financial crisis, amid coronavirus shutdowns and related financial turmoil that pushed borrowing costs higher.

The Mortgage Bankers Association’s index of applications fell 29.4% in the week ended March 20, the biggest decline since early 2009. Home-purchase applications dropped by 14.6% while refinancing applications plummeted 33.8%.

The average contract rate on a 30-year fixed mortgage increased 8 basis points to a two-month high of 3.82%, despite the Federal Reserve cutting the benchmark interest rate to near zero.

The decline in applications is an early sign suggesting home sales will slow and that refinancings are coming off a spike. That follows other data indicating a precipitous dropoff in business activity this month as stores and schools shutter to prevent the spread of the virus.

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