Mortgage Applications Jump as Rates Hit New Lows Again
Mortgage activity increased once again, with mortgage applications rising 8% over the week. Refinancing rose 10%, while purchase loan applications jumped 4%.
Though a 4% jump sounds minimal, it was actually the ninth straight week of increases and the highest level of purchase appolications on record, according to the Mortgage Bankers Association.
Here’s what Joel Kan, MBA’s associate vice president of economic and industry forecasting, had to say about it: “The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a gradual improvement in consumer confidence.”
The rise in refinances, on the other hand, is due to ever-declining mortgage rates, Kan said. Last week, the average rate on 30-year, fixed-rate loans was just 3.3%.
“Mortgage rates dropped to another record low in MBA’s survey, leading to a 10% surge in refinance applications,” he said. “Refinancing continues to support households’ finances, as homeowners who refinance are able to gain savings on their monthly mortgage payments in a still-uncertain period of the economic recovery.”
More in mortgage and housing news
- The share of mortgage loans in forbearance rose to 8.55% this week, only a slight increase over last week’s 8.53%. An estimated 4.3 million homeowners are currently on a forbearance plan.
- Data from MBA shows that lending standards are tightening. According to the group’s Mortgage Credit Availability Index, overall loan availability dropped by 3.1% in May. Standards on conventional and conforming loans tightened the most.
- Fannie Mae and Freddie Mac released their latest market forecasts this week. Both predict 30-year mortgage rates to remain in the low 3% range this year, while Fannie Mae actually expects a 2.9% rate in 2021.
- Google made changes to its ad policies this week, prohibiting advertisers from demographic targeting in housing, credit, and employment-related ads. Advertisers also can’t exclude audiences based on demographic data, including age, gender, ZIP code, or marital status.
This week in mortgage rates
Rates dropped on most loan products this week, with the exception of 5/1 ARMs, which saw a slight increase.
Here’s how they shook out by loan type:
- All 30-year, fixed-rate loans: 3.30%, 0.29 points
- Jumbo 30-year, fixed-rate loans: 3.67%, 0.28 points
- FHA 30-year, fixed-rate loans: 3.33%, 0.23 points
- 15-year, fixed-rate loans: 2.80%, 0.28 points
- 5/1 ARMs: 3.07%, 0.29 points
Mortgage rates are always changing. Make sure to check back next week to see where rates stand.
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