Mortgage Rates Inch Up; VA Refinances Surge
Mortgage rates inched up ever so slightly this week, and applications fell in step. Though the average rate on 30-year, fixed-rate loans fell just five basis points, overall mortgage activity dropped 6.4%.
Refinance applications dropped 8%, while purchase applications dropped 3%. Refinances were still 165% more than one year ago and at their third-highest point so far this year.
Still, while conventional refinances dipped for the week, VA refinances actually jumped over the same period.
Here’s how Joel Kan, MBA’s associate vice president of economic and industry forecasting, explains it: “Treasury yields moved slightly higher last week, despite uncertainty surrounding the economic impact from the spread of the coronavirus. The 30-year fixed mortgage increased five basis points to 3.77% as a result, causing refinance applications — driven by an 11% drop in applications for conventional refinances — to fall. Government refinance activity, which tends to lag movements in the conventional market, bucked the overall trend, as VA loan refinances jumped 23%.”
Looking at activity by loan product, FHA loan applications decreased for the week, while VA applications rose 2 percentage points. USDA loans held steady at 0.4% of all loan activity.
More Mortgage & Housing News
- The Census Bureau released its latest residential construction report, and the results were positive. Overall building permits were up 9.2% for the month and 17.9% over the year. Single-family permits were also up, rising 6.4% for the month.
- A new Bankrate survey found that over a quarter of U.S. homeowners don’t know their current mortgage rate. Given today’s low interest rates, that could keep many homeowners from saving valuable cash via a well-timed refinance.
- In another survey, LendingTree shared that a whopping 45% of homeowners are planning to move to a new home within the next decade. About 30% of those plan to move to a new city or state when they do.
- A Realtor.com analysis revealed that today’s buyers are increasingly on the hunt for alternative living spaces — ADUs, granny flats, mother-in-law suites, and she-sheds. Outdoor features and waterfront locations were also among buyers’ top-searched phrases recently.
This Week’s Mortgage Rates
Now, onto what you came here for: The week’s mortgage rates. According to the latest data from the Mortgage Bankers Association, interest rates increased on all mortgage types this week — though only slightly.
Here’s how average rates broke down by loan product:
- All 30-year, fixed-rate loans: 3.77%, 0.28 points
- Jumbo 30-year, fixed-rate loans: 3.79%, 0.19 points
- FHA 30-year, fixed-rate loans: 3.86%, 0.24 points
- 15-year, fixed-rate loans: 3.22%, 0.26 points
- 5/1 ARMs: 3.23%, 0.21 points
Make sure to check back here next week for the latest interest rate and mortgage news updates.
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