Mortgage Applications Drop, Rates Rise on 30-year Loans

Mortgage Interest Rates Drop

Mortgage activity slowed this week, as the COVID-19 outbreak worsened across the country. According to the weekly applications survey from the Mortgage Bankers Association, purchase activity was down 12% for the week and 33% for the year, while refinance applications dipped 19% for the week. They were still 144% higher than one year prior.

Activity dipped even further in coronavirus hotspots like New York and Washington. In New York, purchase applications were down 47.5% over the year, and in Washington, activity slid almost 60%.

Here’s how Joel Kan, MBA’s associate vice president of economic and industry forecasting, explains it: “Mortgage applications fell last week, as economic weakness and the surge in unemployment continues to weigh heavily on the housing market. With much less liquidity and tighter credit in the jumbo market, average loan sizes declined, and mortgage rates for jumbo loans increased to a high last seen in January.” 

Refinances accounted for about 74% of all mortgage activity last week, down from nearly 76% the week before. FHA loans accounted for 10.6% of applications, while VA loans accounted for 14.3%. 

More Mortgage and Housing News

  • The industry saw a slew of layoffs and furloughs. Companies who slashed ranks include Compass, Realogy, Vacasa, Unison, and Redfin, which furloughed 41% of its agents earlier this week.
  • ATTOM Data Solutions released a list of the U.S. housing markets that are more vulnerable to coronavirus impacts. According to the report, the Northeast and Florida are most at-risk, while the Western and Midwestern parts of the country are least vulnerable.
  • According to a poll from the National Association of Home Builders, 93% of the nation’s builders and remodelers have seen a dip in prospective buyers, and 89% say homeowners are concerned about interacting with remodeling crews. Another 86% have seen remodeling inquiries drop, while 82% say projects are being delayed or all-out canceled due to the pandemic.

Mortgage Rates

The average interest rate on 30-year, fixed-rate loans increased slightly for the week, rising from 3.47% to 3.49% — still a significant decrease over last year. Rates on jumbo loans and 5/1 ARMs also increased minimally, while FHA loans and 15-year loans saw rates drop.

Here’s a glimpse at where average mortgage rates landed for the week:

  • All 30-year, fixed-rate loans: 3.49%, 0.28 points
  • Jumbo 30-year, fixed-rate loans: 3.87%, 0.26 points
  • FHA 30-year, fixed-rate loans: 3.54%, 0.19 points
  • 15-year, fixed-rate loans: 3.04%, 0.25 points
  • 5/1 ARMs: 3.39%, -0.02 points

Be sure to check back next week for the latest mortgage rates.

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By Aly Yale / April 9th, 2020 / Categories: , , / Tags:

Aly Yale

Aly J. Yale is a mortgage and real estate writer based in Houston. Connect with her at AlyJYale.com or on Twitter at @AlyJwriter.