Mortgage Applications Hold Steady, While Rates Drop
Mortgage activity held steady last week, with total applications increasing just 0.1% from the week prior.
Purchase loan applications actually jumped 6% over the week, while refinance applications decreased 2% over the same period. Refinancing activity was still 210% higher than this time last year.
According to Mike Fratantoni, senior vice president and chief economist at the Mortgage Bankers Association, purchase activity was up significantly in states like Arizona, Texas, and California.
“Although purchase activity remains almost 19% below year-ago levels, this annualized deficit has decreased as more states reopen amidst the apparent, pent-up demand for homebuying,” Fratantoni said.
The average rate on 30-year, fixed-rate loans was 3.40% — down from 3.43% last week. The low rate wasn’t enough to spur a jump in refinancing, though, and refinance applications fell to just 70% of total activity, a drop from the 71.6% seen the week prior.
Here’s how Fratantoni explained it: “Despite lower rates, refinance applications dropped, as many lenders are offering higher rates for refinances than for purchase loans, and others are suspending the availability of cash-out refinance loans because of their inability to sell them to Fannie Mae and Freddie Mac.”
More in Mortgage and Housing News
- The MBA released its latest forbearance numbers on Monday. Over 7.5% of all mortgage loans are now in forbearance, with Ginnie Mae-backed loans seeing the highest rate. A total of about 3.8 million mortgage borrowers are on a forbearance plan.
- Airbnb announced plans for major cutbacks this week. The short-term rental platform will reduce its workforce by 25%, eliminating 1,900 jobs in the process. The news comes just weeks after the company halted all marketing efforts entirely.
- Opendoor became the first iBuyer to get back in the game since the coronavirus outbreak started. The company began buying homes in Phoenix this week and plans to expand to Raleigh-Durham, North Carolina next week.
- New listings were nearly halved in April, dropping 45% in April, according to Realtor.com. The average home sold last month was on the market 62 days — four days longer than the same time last year.
The Week in Mortgage Rates
Interest rates dropped on all loan types this week. Here’s a quick look at how rates shook out:
- All 30-year, fixed-rate loans: 3.40%, 0.30 points
- Jumbo 30-year, fixed-rate loans: 3.69%, 0.34 points
- FHA 30-year, fixed-rate loans: 3.37%, 0.20 points
- 15-year, fixed-rate loans: 2.93%, 0.29 points
- 5/1 ARMs: 3.20%, 0.36 points
Be sure to check back next week for the latest update on interest rates.
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