Mortgage Rates Reach New Low, Applications Rise
Overall mortgage activity jumped last week, with total applications rising 5% over the previous week. Refinance applications were up 12% (107% for the year), while purchase loan activity actually fell 6%.
Despite the drop, according to Joel Kan, associate vice president of economic and industry forecasting at the Mortgage Bankers Association, home buying is still going strong. In fact, purchase applications rose 54% in June alone.
“Purchase applications fell over the week but remained 15% higher than a year ago — the eighth consecutive week of year-over-year increases,” Kan said. “Purchase activity remains relatively strong, despite the continued economic uncertainty and high unemployment caused by the ongoing pandemic.”
In total, refinances accounted for over 64% of total loan applications. That’s up from just 60% the week earlier. Kan attributes the uptick in refinancing to mortgage rates, which reached yet another all-time low — this time 3.19% — earlier this week.
“The drop in rates led to a jump in refinance activity to the highest level in a month, with refinance loan balances also climbing to a high last seen in March,” Kan said.
The rates also led to an increase in FHA and VA lending. USDA loans fell for the week.
More in Mortgage and Housing News
- The share of mortgage loans in forbearance dropped to 8.18% this week, down from 8.39%. About 4.1 million homeowners are still in forbearance.
- According to MBA, mortgage lending standards tightened in June, with overall credit availability dipping 3.3% for the month. Jumbo loan availability fell the most, dropping 7.3%, while conventional loan availability decreased by 4.1%.
- Redfin reported a jump in bidding wars for June, with 54% of all offers meeting competition last month. That’s up from 51% in May and 44% in April. Bidding wars were most common on single-family homes and townhouses.
This Week in Mortgage Rates
Rates either dropped or held steady across all loan types this week.
Here’s a look at how rates shook out::
- All 30-year, fixed-rate loans: 3.19%, 0.33 points
- Jumbo 30-year, fixed-rate loans: 3.53%, 0.29 points
- FHA 30-year, fixed-rate loans: 3.24%, 0.29 points
- 15-year, fixed-rate loans: 2.70%, 0.32 points
- 5/1 ARMs: 3.00%, 0.02 points
Be sure to check back here next week for the most up-to-date rate info or get in touch with an Embrace loan officer for more personalized details.
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