Mortgage applications up 6%; home buys barely off 2019 mark

May 20 (UPI) -- U.S. mortgage applications are up another 6 percent, as more potential homebuyers aim to re-enter the housing market, according to new data Wednesday.

The Mortgage Bankers Association's seasonally adjusted index showed a fifth consecutive week in which mortgage applications increased from the prior week, after reaching a bottom in early April.

The index said purchase volume is only 1.5 percent lower than it was in May 2019, which experts say is a surprisingly fast recovery. Six weeks ago, that volume was down 35 percent year-to-year.

"Applications for home purchases continue to recover from April's sizeable drop and have now increased for five consecutive weeks," Joel Kan, MBA associate vice president of economic and industry forecasting, said in a statement.

"Government purchase applications, which include FHA, VA, and USDA loans, are now 5 percent higher than a year ago, which is an encouraging turnaround after the weakness seen over the past two months."

Total applications, including those for refinancing, were down 2.6 percent for the week, the inex showed.

The new data indicate American homebuyers are returning to the market much quicker than expected after a slowdown spurred by the coronavirus pandemic. Part of the attraction are record low mortgage rates, analysts said.

The National Association of Home Builders/Wells Fargo Housing Market Index on Monday showed that confidence for new single-family homes is up 7 points this month.

NAHB economists cited looser COVID-19 restrictions nationwide as a major factor, as it's boosting demand, applications and buyer traffic.