In the midst of the coronavirus pandemic, Americans haven’t shied away from buying homes.
The volume of mortgage applications for home purchases hit the highest level last week since the first week of January 2009 on a seasonally adjusted basis, according to data from the Mortgage Bankers Association, a trade organization. The increase also marked the ninth straight week of gains.
Read more: Buying a home: What you need to know about home ownership
The purchase mortgage index for the week ending on June 12 was 268.6% higher than a year ago and 3.5% higher than the previous week.
“The housing market continues to experience the release of unrealized pent-up demand from earlier this spring,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting, “as well as a gradual improvement in consumer confidence.”
‘Higher earners are showing interest’
Housing activity appears unaffected by the swollen ranks of unemployed Americans since the pandemic began and triggered shutdowns across the country. As states and businesses reopen, homebuyers are back in droves.
“We know from the unemployment data that higher income earners have been less impacted,” said Danielle Hale, chief economist at Realtor.com, a real estate listing site. “So, it’s likely that these higher earners are showing interest in housing.”
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The MBA data showed that applications for mortgages backed by the Federal Housing Administration — which often cater to those with lower incomes, credit scores, and down payments — shrunk in volume from 11.5% the prior week to 11%.
A lack of entry-level housing also remains a problem for lower earning homebuyers.
“A shortage of affordable housing in many areas of the country was a problem before the pandemic and the issue has not improved since,” said Matthew Speakman, an economist at Zillow, a listing site. “The number of affordable for-sale homes on the market currently remains historically low, which is keeping home prices afloat — and even increasing in the midst of a pandemic.”
Low mortgage rates boost refinancing
The MBA data also showed that refinancing activity boomed.
The refinance index was 1,888.8% higher than a year ago and 10.3% higher than the week ending June 5. The increase comes when the rate on a 30-year fixed mortgage reached a new low in MBA’s survey, falling to 3.30% from 3.38%.
“Refinancing continues to support households’ finances, as homeowners who refinance are able to gain savings on their monthly mortgage payment in a still-uncertain period of the economic recovery,” Kan said.
The refinance share of mortgage activity increased to 63.2% of total applications from 61.3% the previous week.
“It’s a good idea to refinance if you are planning to remain in your home for a long enough time to recoup enough monthly savings to offset the costs of refinancing,” Hale said. “It’s a good way to lock in savings.”
Read more: Refinancing Mortgages: Everything you need to know
But as home values continue to increase and credit remains tight, Hale said waiting may also have its benefits. Don’t worry about missing the low rates. Hale expects those to stick around through the rest of the year.
“One reason you may choose to wait is if you would be able to build up more equity to qualify for a better rate by waiting a few months,” she said.
Dhara is a reporter Yahoo Money and Cashay. Follow her on Twitter at @Dsinghx.
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