The numbers don't lie. Economists at Freddie Mac report home purchase demand is up 20% annually and at its highest level of activity since 2009. The Mortgage Bankers Association delivered similar data this week, with purchase applications up for a ninth straight week. On a yearly basis, the MBA shows purchase applications are up 21%, the highest volume in more than a decade. 

This is due to a combination of historically low interest rates—that seem to get lower every week—and the reopening of the economy. Freddie Mac's 30-year fixed-rate mortgage average is down to 3.13%, the lowest in its history. That has also spurred refinance applications to a 106% annual increase, according to the MBA. 

But those refinances come with a catch. When people take advantage of a refi, it typically means they are not going to list their home for sale anytime soon. According to the National Association of Realtors, this trend has contributed to a 12% annual slowdown in new listings. The competition is fierce on the market, with the NAR reporting nine new contracts for every ten new listings. 

In a recent interview in the Mortgage Impact Podcast, the NAR's Vice President for Demographics and Behavioral Insights, Dr. Jessica Lautz, says there is anecdotal evidence that people see this time as a window of opportunity to take advantage of the extremely low rates and get into a home instead of continuing to rent. But there's also been a change in the types of people who are buying. “We have seen a rise in the number of unmarried couples buying together,” says Lautz, “but we've also seen a rise in the number of roommates buying together.” 

Fed urges Congress to continue support 

Federal Reserve Chairman Jerome Powell made his case on political policy in his testimony to the House of Representatives Financial Services Committee. Powell pushed Congress to extend unemployment insurance benefits, support state and local governments and continue to get cash to struggling businesses. 

In part, Powell said, “The levels of output and employment remain far below their pre-pandemic levels, and significant uncertainty remains about the timing and strength of the recovery. Much of that economic uncertainty comes from uncertainty about the path of the disease and the effects of measures to contain it. Until the public is confident that the disease is contained, a full recovery is unlikely.”

Dow futures were up more than 300 points Friday morning as the market headed for a winning week. The 10-year Treasury note yield was trading at 0.723% early Friday. Earlier in the week, the Dow and S&P 500 suffered losses due to unemployment numbers and reports of increased cases of COVID-19. 

For the 13th straight week, jobless claims have totaled more than 1 million Americans. The Labor Department reported that 1.5 million Americans filed initial unemployment claims, with continuing claims—people reporting two straight weeks or more of unemployment—reported at 20.5 million. It should be noted that more than 760,000 of the initial unemployment claims were filed as part of the Pandemic Unemployment Assistance program. That program was part of the CARES Act, which allowed people who traditionally would not qualify for unemployment, like independent contractors, to apply for assistance.