Weekly mortgage applications rise, as rates hit 30-year low
Despite larger-than-usual daily fluctuations last week, mortgage rates fell to their lowest level ever recorded in the Mortgage Bankers Association’s weekly survey 30 years ago, sparking another rush to refinance.
Total mortgage application volume rose 7.3% last week from the previous week, according to the seasonally adjusted MBA index.
The average contractual interest rate for 30-year fixed rate mortgages with compliant loan balances of $ 510,400 or less has declined from 3.49% to 3.45%. This is the lowest level since the MBA began its weekly application survey in 1990. Points have dropped from 0.29 to 0.29, including set-up fees, for loans with a down payment. 20%. That’s 99 base less than a year ago.
“The drop in rates – despite rising Treasury yields – is a sign that the mortgage-backed securities market is stabilizing and that lenders are successfully working in their lending pipelines,” said Joel Kan, economist at MBA.
This floor rate caused a weekly increase of 10% in mortgage refinancing requests. The refinancing volume was 192% higher than a year ago.
The low rates haven’t done much for homebuyers. Mortgage applications to buy a home fell for the fifth week in a row, down 2% from the previous week and 35% from a year ago. The spring housing market started early and appears to have ended early due to the economic downturn and social distancing caused by the coronavirus outbreak. Purchase requests in the hardest-hit states – New York, California and Washington – are about half of those of a year ago.
“The purchasing market is still expected to rebound, as long as public health measures to reduce the spread of the pandemic are successful and lead to a broader recovery,” Kan said.
Home buyers are always around, taking virtual tours and looking for bargains. Freddie Mac released a cautiously optimistic report, predicting very strong home sales in 2021.
“Without a doubt, the housing market faces its biggest challenge in over a decade as our country weathered this unprecedented economic event,” said Sam Khater, chief economist at Freddie Mac. “Although the uncertainty of the crisis means that forecasts of economic activity are more fuzzy than usual, we expect most of the economic damage from the virus to be contained until the first half of the year. . “