Mortgages Rates Increase Slightly; Lending Sees its Biggest Quarter in 14 Years

Mortgage Weekly Update

Mortgage rates inched up slightly this week, but they still hover around historic lows. According to the Mortgage Bankers Association (MBA), the average rate on a 30-year, fixed-rate loan came in at 3.72% this week — up from 3.71% last week

As a result of the low rates, overall mortgage activity was up 3% for the week, with refinances jumping 5% over the same time period. Compared to last year, refinancing activity is now up a whopping 207%, hitting its highest point in nearly seven years. 

Purchase loans have also increased over the year with a 16% jump since February 2019. 

Here’s what Joel Kan, MBA’s associate vice president of economic and industry forecasting, had to say about the week: “The mortgage market continues to be active in early 2020, as applications increased for the third straight week. Rates also rose, but still remained close to their lowest levels since October 2016.”

Refinances accounted for 65.5% of all mortgage activity for the week (up from 64.5% last week), and adjustable-rate and FHA mortgage activity increased as well. FHA loans made up 9.7% of all mortgages, VA loans accounted for 10.1%, and USDA loans were 0.4%. 

According to Kan, the mortgage market has seen a strong start to 2020 so far.

“Last month was the strongest January for purchase applications since 2009, which is perhaps a sign that mild weather brought out prospective buyers earlier than normal,” Kan said. “Despite a decline last week, purchase activity was still up almost 16% from a year ago.”

More in Mortgage and Housing News

  • The Federal Reserve Bank of New York released its 2019 Q4 mortgage lending data and apparently, the mortgage industry had its biggest quarter in 14 years. More than $750 billion in new mortgages were originated during the time period.
  • The latest data from Black Knight shows that 11.3 million Americans are what’s considered “high-quality refinance candidates.” 
  • The fourth quarter also saw a surge in new home sales, according to data from Redfin. Sales of new construction homes rose 8.8% for the year, hitting their highest levels since 2017.

This Week in Mortgage Rates

Interest rates were up slightly on all mortgage types, except for 5/1 ARMs, which saw a slight decrease over last week. 

Here’s a look at how average rates looked for each loan type:

  • All 30-year, fixed-rate loans: 3.72%, 0.28 points
  • Jumbo 30-year, fixed-rate loans: 3.75%, 0.17 points
  • FHA 30-year, fixed-rate loans: 3.80%, 0.26 points
  • 15-year, fixed-rate loans: 3.20%, 0.27 points
  • 5/1 ARMs: 3.21%, 0.13 points

Be sure to come back next week for another update on rates and the latest mortgage headlines.

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By Aly Yale / February 13th, 2020 / Categories: , , / Tags:

Aly Yale

Aly J. Yale is a mortgage and real estate writer based in Houston. Connect with her at AlyJYale.com or on Twitter at @AlyJwriter.