Mortgage Rates Drop, Sending Applications Upward
Mortgage rates fell for the second week in a row this week. According to Freddie Mac, the average rate on a 30-year, fixed-rate loan now clocks in at 2.98% — down from 3.09% last week.
“Despite the re-acceleration of economic growth, the recent bond rally drove mortgage rates down for the second consecutive week,” said Sam Khater, Freddie Mac’s Chief Economist. “These low mortgage rates, combined with the tailwind of first-time homebuyers entering the market, means that purchase demand will remain strong into next year.”
Khater is right about demand: According to the Mortgage Bankers Association, overall mortgage applications jumped 5.5% for the week. Purchase applications increased 3%, while applications to refinance rose 7%.
“Homeowners acted on the decrease in rates,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Refinance activity was up 7% overall, with gains in both conventional and government refinances. Additionally, the average loan balance for a refinance application was the highest in a month.”
MBA’s data shows that refinances accounted for 63.5% of all mortgage applications last week — up from 61.9% the week prior.
More in mortgage & housing news
- According to Realtor.com, the national median listing price was up 8.6% over the year in October and 5.2% in larger metros. The median price now sits at $380,000.
- Pending sales fell in September, dropping 2.3% from the month prior. Contract signings fell the most in the Midwest and Northeast regions of the U.S.
- Mortgage loans got slightly easier to come by last month, according to MBA. Lending standards eased the most on conforming and jumbo loans.
- Just over 2% of all mortgage borrowers are still on a forbearance plan, MBA reported this week. That comes out to right around 1 million homeowners nationwide.
- Foreclosure filings increased 5% in October and are now up 76% compared to a year ago, according to ATTOM Data Solutions. It’s the sixth consecutive year-over-year increase in a row.
This week in mortgage rates
Interest rates fell on all mortgage products this week, according to Freddie Mac.
Here’s how rates looked for each loan type:
- Conforming 30-year, fixed-rate loans: 2.98% (down from 3.09%)
- 15-year, fixed-rate loans: 2.27% (down from 2.35%)
- 5/1 adjustable-rate loans: 2.53% (down from 2.564
Make sure to check back here next week for the latest mortgage rates and news.
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