Mortgage applications to purchase a home plunged in states where lockdowns went into effect, the Mortgage Bankers Association reported today. And those lockdowns aren’t even fully reflected yet as they went into effect during the last part of that reporting week, ended March 20, or just after the reporting week, and what you see here is the prelude. This is the drop from the prior week, seasonally adjusted:
- California: -23%
- State of New York: -35%
- State of Washington: -17%.
But purchase mortgage applications are a gauge of local demand by regular folks. That demand had been strong, and is now collapsing under the lockdowns.
Over the next few weeks, more states and cities will impose lockdowns. And demand for purchase mortgages will hit horridly low levels: It is difficult to shop for a home in areas under lockdown, and home sellers are reluctant to show homes to people who are potentially infected. There will be some activity, sure, including via online platforms, such as open-house videos. But much of the activity will come to a halt. And mortgage applications will be early data points that document this trend.