Borrowers rush to refinance, as mortgage rates drop for second week – NBC Connecticut
- The average contractual interest rate for 30-year fixed rate mortgages with compliant loan balances decreased from 3.24% to 3.16%.
- The demand for refinancing increased by 7% last week compared to the previous week.
- Mortgage applications for the purchase of a home were up 3% for the week, but were 4% lower than the same week a year ago.
Mortgage rates fell for the second week in a row last week, helping to boost demand for refinancing for the first time in some time. As a result, total mortgage application volume rose 5.5% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contractual interest rate for 30-year fixed rate mortgages with compliant loan balances ($ 548,250 or less) decreased to 3.16% from 3.24%, with points remaining unchanged at 0 , 34 (including set-up costs) for loans with a down payment of 20%. The rate is now down 14 basis points over the past two weeks, but still 18 basis points higher than the same week a year ago.
Refinancing demand, very sensitive to weekly rate fluctuations, increased 7% last week compared to the previous week. However, it was 28% lower than the previous year. The refinancing share of mortgage activity rose to 63.5% of total applications, from 61.9% the previous week.
âWhile overall activity remains close to January 2020 lows, homeowners have taken action on lowering rates,â said Joel Kan, MBA economist. “Plus, the average loan balance for a refinance request was the highest in a month.”
Mortgage applications for the purchase of a home were up 3% for the week, but were 4% lower than the same week a year ago. The housing market has entered its slower season well, and although demand is stronger than usual, homebuyers still face a lean and expensive market. The brief rate cut may have brought some buyers back, but given the high level of costs today, it hasn’t given them much more purchasing power.
Mortgage rates fell slightly at the start of the week. They are now at the best levels since the end of September.