Mortgage Rates Drop, Applications Fall in Step
Mortgage rates dropped again this week, but so did overall application activity. According to the latest data from the Mortgage Bankers Association, despite an average interest rate of just 3.14%, loan applications dropped 5.1% over the last week.
Refinance activity fell 7%, while purchase loan activity dropped just 2%. Both are still higher than 2019’s numbers (by 84% and 22%, respectively).
Rates on 30-year, fixed-rate loans dropped from 3.2% to 3.14% for the week. Rates also dropped on jumbo loans and 15-year fixed mortgages, and held steady for FHA loans.
According to Joel Kan, MBA’s associate vice president of economic and industry forecasting, rates are expected to remain this low for a while.
“MBA’s forecast calls for rates to remain at these low levels, which will continue to spur strong refinance activity and offer homeowners relief in the form of lower monthly mortgage payments during these uncertain economic times,” Kan said.
More in mortgage and housing news
- Forbearances dropped for the seventh straight week. Now, 7.67% of all mortgage loans are in forbearance, down from 7.74% last week. About 3.8 million homeowners total are still on a forbearance plan.
- Zillow officially resumed its iBuying operations in all 24 markets it has a presence in. The company had paused these operations — dubbed “Zillow Offers,” early in the pandemic.
- The national median home price crept up to $349,000, according to Realtor.com, due to surging homebuying demand. It’s an 8.5% jump in price over the year.
- Reverse mortgages are on the rise, according to the latest data. HECM loans were up in July and have now surpassed their long-term average.
- A new survey from LendingTree revealed the biggest stressors facing today’s home sellers. Apparently, buying and selling at the same time takes the cake, with 29% saying it’s their biggest source of stress. Making repairs comes in at No. 2.
This week’s mortgage rates
Mortgage rates dropped or held steady on most loan products, with the exception of 5/1 ARMs.
Here’s a look at how rates shook out:
- All 30-year, fixed-rate loans: 3.14%, 0.39 points
- Jumbo 30-year, fixed-rate loans: 3.51%, 0.33 points
- FHA 30-year, fixed-rate loans: 3.27%, 0.42 points
- 15-year, fixed-rate loans: 2.73%, 0.37 points
- 5/1 ARMs: 3.09%, -0.03 points
Check back here next week for the most up-to-date mortgage rates.
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