(WKBN) – When you buy a house, price matters, but the cost of financing is too.
Mortgage rates experienced their biggest drop of a week since a decade ago last week.
Locally, the slide was three-eighths of a percentage point.
"As a rule, the rates do not change as much in the space of a week or two, unless something important happens.I would say it was rather dramatic to see it." said Aaron Frank, mortgage consultant 7/17.
The Mortgage Bankers Association said the volume of its mortgage applications had increased 18.6% over the previous week. Mortgages to buy a home were 10% higher than a year ago.
"That certainly stimulated some purchases, but with the purchases, I mean, we're seeing an increase in refinancing as a result of that," Frank said.
Requests for refinancing increased by 39%, reaching their highest level in three years.
The 30-year average fixed rate loan peaked at around 3.5% in the summer of 2016.
Rates were above 5% in November.
This lower interest rate makes it beneficial to consider refinancing.
"You're probably going to see a difference of $ 20 to $ 25 between your loans of $ 70,000 to $ 80,000 – it's a decent amount," Frank said.
Each year in March, the Welcome Home Program (managed by the Federal Real Estate Loans Bank of Cincinnati) awards grants of $ 5,000 or $ 7,500 to help with the down payment or closing costs, if you qualify.
Many local financial institutions can help you find out.
"So when you get this subsidy, coupled with lower interest rates, you will definitely see an increase in those purchases," Frank said.
You can monitor interest rates yourself, but many financial institutions will also do this automatically. You can sign up to receive notifications on rate adjustments.