Mortgage Applications Jump as Rates Hit Lowest Point in Weeks
Mortgage applications surged this week as interest rates hit their lowest point in weeks, according to the Mortgage Bankers Association.
Purchase activity rose 7% for the week and was 57% higher than levels seen a year ago. Refinances increased a whopping 10% over the week. They’d previously been declining since the start of March.
In both cases, low interest rates are to thank, says Joel Kan, MBA’s associate vice president of economic and industry forecasting. Rates on 30-year loans dropped to 3.20% this week, down from 3.27% a week ago.
“Mortgage rates dropped to their lowest levels in around two months, prompting a small resurgence in refinance activity after six weeks of declines,” Kan says. “Borrowers acted on the decrease in rates for most loan types, with both conventional and government refinance applications showing gains.”
Fortunately, it seems the numbers aren’t just a blip on the radar — at least when it comes to purchase activity.
“MBA expects the purchase market to remain strong, with the recovering job market and supportive demographics fueling housing demand in the months ahead,” Kan says.
More in mortgage and housing news
- The share of mortgage loans in forbearance has fallen to just 4.5%, down from 4.66% the week prior. According to MBA, 2.3 million homeowners are still on a forbearance plan.
- New data from Redfin shows that luxury home sales jumped 41.6% annually for the first quarter of 2021. Sales of lower-priced homes rose just 7%, while mid-priced properties increased less than 6%.
- New home purchases were up 7% annually in March and 12% over the month. The average loan size on these properties was $374,000 — the highest on record, MBA says.
This week in mortgage rates
Mortgage rates dropped on all loan products, with the exception of 5/1 ARMs. Those saw a slight increase of 7 basis points.
Here’s how rates looked for each loan type:
- Conforming 30-year, fixed-rate loans: 3.20% (down from 3.27%)
- Jumbo loans: 3.34% (down from 3.35%)
- FHA 30-year, fixed-rate loans: 3.15% (down from 3.24%)
- 15-year, fixed-rate loans: 2.65% (down from 2.67%)
- 5/1 adjustable-rate loans: 2.67% (up from 2.60%)
Make sure to check back here next week for the latest mortgage news.
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