Rates Continue to Slip Amid Fears of a Coronavirus Resurgence

Mortgage Interest Rates Drop

Overall, mortgage activity increased by 2.2% this week, though the data does include an adjustment for the Fourth of July holiday. Purchase applications increased 5% from this time last week while refinance applications increased 0.4%. Both metrics were also an increase from the same time last year.

Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, attributes the increase in applications to a decrease in rates, following fears of a coronavirus resurgence.

He reports, “Mortgage rates declined to another record low as renewed fears of a coronavirus resurgence offset the impacts from a week of mostly positive economic data, such as June factory orders and payroll employment. The 30-year fixed-rate slipped to 3.26 percent — down 53 basis points since late March. Borrowers acted in response to these lower rates, after accounting for the July 4th holiday.” 

Kan also noted that the average purchase loan size also reached a record high in response to low inventory rates, saying, “The average purchase loan size increased to $365,700 — also another high — as borrowers contend with limited supply and higher home prices.”

More in Housing and Mortgage News

  • Rocket Companies, Inc., the parent company for Rocket Mortgage and Quicken loans, made waves earlier this week by filing for an initial public offering (IPO) and disclosing its income for the last three years.
  • In the commercial mortgage industry, mortgage delinquency rates jumped 213 basis points to a rate of 3.59% in June, the largest one-month spike since Fitch Ratings began tracking the metric in 2004.
  • The Consumer Finance Protection Bureau (CFPB) recently proposed an escrow exemption for higher-priced mortgage loans under the Growth Act.

This Week in Mortgage Rates

Once again, rates dropped across the board this week. 

Here’s a look at what happened with each type of loan:

  • All 30-year, fixed-rate loans: 3.26%, 0.35 points
  • Jumbo 30-year, fixed-rate loans: 3.52%, 0.36 points
  • FHA 30-year, fixed-rate loans: 3.31%, 0.24 points
  • 15-year, fixed-rate loans: 2.77%, 0.32 points
  • 5/1 ARMs: 2.98%, 0.10 points

Be sure to check in next week for the most up-to-date information on where rates are headed next.

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By Tara Mastroeni / July 9th, 2020 / Categories: , / Tags:

Tara Mastroeni

Tara Mastroeni is a real estate and personal finance writer. Find her at TMRealEstateWriter.com or on Twitter at @TaraMastroeni.