Mortgage Activity Jumps, as Rates Hold Steady at Record Lows

Mortgage Interest Rates Drop

Both home buying and refinancing demand jumped last week. 

According to the latest data from the Mortgage Bankers Association, total mortgage applications rose 9.3% over the week, with refis increasing 11% and purchase applications jumping 5%. It was the eighth straight week that purchases have increased.

Joel Kan, MBA’s associate vice president of economic and industry forecasting, says the jumps were spurred by low mortgage rates, “pent-up demand from earlier this spring,” and stay-at-home orders continuing to lift across the country.

“The recovery in the purchase market continues to gain steam, with the seasonally adjusted index rising to its highest level since January,” Kan said. “Purchase activity increased for the eighth straight week and was a notable 13% higher than a year ago. “Refinances moved higher for the first time in nearly two months, with both conventional and government applications rising and the overall index coming in 80% above year-ago levels.”

In other good news, rates on 30-year, fixed-rate lows held steady this week, sitting at 3.38% for the average borrower. 

More Mortgage and Housing News

  • Overall mortgage credit availability dropped in May, according to the MBA. Credit availability fell 3.1% for the month, dropping the most on jumbo loans and conforming loans. 
  • The number of mortgage loans in forbearance hit 8.53% this week, equating to about 4.3 million homeowners. Loans guaranteed by Ginnie Mae saw the largest share of loans in forbearance at 11.83%. A nice silver lining though: The total number of forbearance requests (as a share of portfolio volume) actually dropped for the week. 
  • Apparently, many of today’s home sellers are “pandemic-pricing” their properties. According to a new report, the past three months have seen discounted prices at 2 to 11% below pre-coronavirus levels. The discounts are most prevalent in three Texas metros: El Paso, San Antonio, and Killeen. New York City, St. Louis, and Baltimore also have steep discounts.

The Week in Mortgage Rates

Rates shifted only slightly on most loan products, still remaining near historic lows across the board.

Here’s how they shook out:

  • All 30-year, fixed-rate loans: 3.38%, 0.30 points
  • Jumbo 30-year, fixed-rate loans: 3.70%, 0.26 points
  • FHA 30-year, fixed-rate loans: 3.38%, 0.24 points
  • 15-year, fixed-rate loans: 2.83%, 0.26 points
  • 5/1 ARMs: 3.02%, 0.27 points

Mortgage rates change daily. Check back next week to see where rates stand.

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