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Mortgage interest rates have hit record lows more than a dozen times this year, and last week there was another. This resulted in a 3.9% increase in mortgage application volume from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
Refinancing requests led the way, climbing 5% for the week at the highest pace since last April. The volume was 79% higher than the same week a year ago. The refinancing share of mortgage activity rose to 71.1% of total applications, against 69.8% the previous week.
The average contract interest rate for 30-year fixed rate mortgages with compliant loan balances ($ 510,400 or less) decreased to a low of 2.92%, from 2.99% to 0 .35 from 0.37 (including set-up costs) for loans with a down payment of 20%.
“Weekly mortgage rate volatility has reappeared, as markets respond to fiscal policy uncertainty and the resurgence of Covid-19 cases across the country,” said Joel Kan, associate vice president of the industry and economic forecast of MBA.
While over 4 million borrowers have already refinanced their home loans so far this year, more than 19 million more could still save significantly on their monthly payments through refinancing, according to a recent calculation by Black Knight, a provider of mortgage technology and data. Today’s average mortgage rate is about a percentage point lower than it was a year ago.
Homebuyers also get an added benefit from current rates, despite the steep rise in home prices. Mortgage applications to purchase a home are up 4% for the week and 19% from the same week a year ago.
“Amid stiff competition for a limited supply of homes for sale, as well as a rapid increase in house prices, purchase requests have increased for both conventional and government borrowers. ‘buying has been above year-ago levels for more than six months, ”Kan said.
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