Purchases, Refis Jump as Rates Dip Again

Mortgage Weekly Update

Mortgage activity jumped over Labor Day weekend, with refinances rising  3% over the week, and purchase loans up a slight 0.2%. Both are still up considerably over the year.

According to Joel Kan, the uptick was due to dropping mortgage rates, which have hovered near historic lows for months now.

“Mortgage rates declined last week, with a noteworthy five-basis-point decrease in the 15-year fixed rate to a new record low of 2.62%,” Kan said. “The drop in rates led to a rebound in refinancing activity, driven mainly by borrowers applying for conventional loans.”

But conventional loans weren’t the only loan types to see a bump. VA and FHA purchase activity also rose for the week. 

Average rates dipped from 3.08% to 3.07% on 30-year, fixed-rate loans, while FHA loans fell from 3.19% to 3.16%. Rates on 5/1 ARMs, 15-year loans, and jumbo loans also fell.

More in Mortgage and Housing News

  • The share of mortgage loans in forbearance fell to 7.16% this week, according to the Mortgage Bankers Association. It’s the 13th weekly drop in a row. An estimated 3.6 million homeowners are still in forbearance.
  • A whopping 55% of Redfin buyers found themselves in a bidding war in August, according to a new report. Buyers in San Francisco and San Jose faced the most competition, with 65.2% in a bidding war. Salt Lake City, San Diego, Washington, D.C. Seattle, and Minneapolis also topped the list.
  • Remote work transitions could add about 2 million more homebuyers to the market, according to research from Zillow. That’s about 4.5% of total renter households.  
  • Rising lumber prices may stall American homebuilders as they attempt to meet surging demand. According to the National Association of Home Builders, the price of lumber has jumped over 160% since mid-April. It has added about $16,000 to the price of a new single-family home and another $6,000 to new apartments.

This Week’s Mortgage Rates

Rates fell across the board this week. Here’s a quick look at the weekly averages for each loan type:

  • All 30-year, fixed-rate loans: 3.07%, 0.36 points
  • Jumbo 30-year, fixed-rate loans: 3.40%, 0.31 points
  • FHA 30-year, fixed-rate loans: 3.16%, 0.42 points
  • 15-year, fixed-rate loans: 2.62%, 0.33 points
  • 5/1 ARMs: 2.99%, 0.58 points

Check back here next week for the latest mortgage rates.

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By Aly Yale / September 10th, 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.