Mortgage Rates Fall; Purchase, Refi Applications Follow Suit
Mortgage rates decreased yet again — but so did applications to both buy and refinance a home.
According to the Mortgage Bankers Association, the average rate on a 30-year loan fell to 3.17% this week, down from 3.2% the week prior. Despite the slide, mortgage activity actually slipped over the week, particularly on the purchase side.
Purchase loan applications dropped 5% for the week. Here’s how Joel Kan, MBA’s associate vice president of economic and industry forecasting, explained it: “The purchase market’s recent slide comes despite a strengthening economy and labor market,” Kan said. “Activity is still above year-ago levels, but accelerating home price growth and low inventory has led to a decline in purchase applications in four of the last five weeks.”
Refinances also fell for the week, though only slightly (a mere 1%). Refinance applications have decreased in seven of the eight last weeks — a side effect of extremely low mortgage rates for nearly a year now.
As Kan puts it, “Even with a few weeks of lower rates, most borrowers have likely already refinanced.”
More in mortgage & housing news
- The share of mortgage loans in forbearance decreased to 4.49% of all loans this week, according to MBA. About 2.25 million homeowners are still on a forbearance plan.
- According to the S&P CoreLogic Case-Shiller Index released this week, home prices are now up 12% over the year. They also jumped more than 1% between January and February, marking the highest month-over-month increase in 16 years.
- MBA released its latest forecast this week and is now projecting a record-setting year for the mortgage industry. According to the trade group, originations are set to grow 16.4% this year, clocking in at around $1.67 million total by year’s end.
- A tax credit for first-time homebuyers was introduced in the House this week. It would offer up to $15,000 for qualifying buyers.
This week in mortgage rates
Mortgage rates dropped on all loan products this week, with 15-year loans seeing the biggest slide.
Here’s how rates looked for each loan type:
- Conforming 30-year, fixed-rate loans: 3.17% (down from 3.20%)
- Jumbo loans: 3.28% (down from 3.34%)
- FHA 30-year, fixed-rate loans: 3.12% (down from 3.15%)
- 15-year, fixed-rate loans: 2.55% (down from 2.65%)
- 5/1 adjustable-rate loans: 2.59% (up from 2.67%)
Make sure to check back here next week for the latest mortgage news.
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