Homeowners jumped on refinances this week, the Mortgage Bankers Association reported, acting on historically low rates, which continue to hover in record territory.
Just over 75 percent of applications were refinances, according to the MBA, compared to 66 percent the previous week, and its Refinance Index surged 79 percent.
“Market uncertainty around the coronavirus led to a considerable drop in U.S. Treasury rates last week, causing the 30-year fixed rate to fall,” Joel Kan, associate vice president of Economic and Industry Forecasting for the MBA, said in a statement. “Homeowners rushed in, with refinance applications jumping 79 percent—the largest weekly increase since November 2008.”
Because of the refinance wave, the MBA changed its forecast this year, doubling its projections to $1.23 trillion—the highest refinance volume since 2012, and a 36.7 percent leap.
Meanwhile, the average 30-year fixed mortgage rate rose to 3.36 percent this week, after bottoming to 3.29 percent the prior week, Freddie Mac reported. The average 15-year fixed reversed track, declining to 2.77 percent, along with the five-year adjustable, decreasing to 3.01 percent.
“As refinance applications continue to surge and lenders work to manage capacity, the 30-year fixed-rate mortgage ticked up from last week’s all-time low,” Sam Khater, chief economist at Freddie Mac, said in a statement. “Mortgage rates remain at extraordinary levels and many homeowners are smartly weighing their options to refinance, potentially saving themselves money.”
“As lenders handle the wave in applications and manage capacity, mortgage rates will likely stabilize but remain low for now,” Kan said. “This in turn will support borrowers looking to refinance or purchase a home this spring.”
Suzanne De Vita is RISMedia’s senior online editor. Email her your real estate news ideas at email@example.com.