Mortgage Rates Drop, Refi Activity Falls in Step

Mortgage Weekly Update

Overall mortgage rates were down this week, according to the Mortgage Bankers Association (MBA), but that didn’t cause an uptick in applications. Despite the average 30-year interest rate falling to 3.91% last week (down from 3.95% and its lowest point since October), the MBA says applications for mortgage loans have fallen 22% over the past two weeks. 

Purchase loans fell the most, according to MBA. Refinance applications dropped 8% (but were still 74% higher than one year ago), while purchase loan applications were down 14% (but up 2% over the year). Refinances made up nearly 59% of all mortgage activity for the week — a jump from last week’s 54.8% share.

According to Mike Fratantoni, MBA’s senior vice president and chief economist, unless rates drop significantly, refinances will probably continue their decline as we get further into the year.

“Despite lower rates, refinance volume decreased these last two weeks, and we expect that it will slowly trail off in the first half of 2020 as long as mortgage rates remain in this same narrow range,” he said. “Homeowners would need to see a sharp drop in rates to reinvigorate the refinance wave seen in 2019.”

Other mortgage and housing news you might have missed

  • LendingTree released a study detailing the big difference in interest costs across credit score tiers. According to its findings, a “very good” score could possibly save someone more than $41,000 on their mortgage (compared to borrowers with just a “fair” score).
  • Fannie Mae’s Home Purchase Sentiment rose yet again, hitting 91.7 — inching close to a record-high. The number of people saying it’s a good time to buy a house clocked in at 59%, up 16 points since one year prior. The share of those saying it’s a good time to sell also jumped, hitting 65%.
  • Total mortgage debt across the U.S. has officially topped $15 trillion. According to a new analysis, Americans hold more than $15.8 trillion in mortgage loans — the largest amount since 2008. 

A quick look at recent mortgage rates

Finally, here’s the data you’ve been waiting for: the mortgage rates for the week. According to MBA’s weekly survey, here’s what average interest rates looked like across each different loan product:

  • All 30-year, fixed-rate loans: 3.91%, 0.34 points
  • Jumbo 30-year, fixed-rate loans: 3.88%, 0.17 points
  • FHA 30-year, fixed-rate loans: 3.85%, 0.23 points
  • 15-year, fixed-rate loans: 3.35%, 0.29 points
  • 5/1 ARMs: 3.19%, 0.18 points

Be sure to check back next week for more on the latest rates and mortgage news, or get in touch with a loan officer for more immediate guidance. We’re here to help when you need it.

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By Aly Yale / January 10th, 2020 / Categories: / Tags:

Aly Yale

Aly J. Yale is a freelance writer focusing on real estate, mortgage, and the housing market. Her work has been featured in Forbes, Bankrate, The Motley Fool, Business Insider, The Balance, and more. Prior to freelancing, she served as an editor and reporter for The Dallas Morning News. She graduated from Texas Christian University's Bob Schieffer College of Communication with a major in radio-TV-film and news-editorial journalism. Connect with her at or on Twitter at @AlyJwriter.