Refis Jump as Rates Stay Near Record Lows

Mortgage Weekly Update

Mortgage activity jumped this week, rising 3% overall. Refinances jumped nearly twice that, up 6% over the week. Applications for refinance loans are now up 88% since this time last year.

The jump was thanks to low mortgage rates, which held steady on 30-year, fixed-rate loans.

“Mortgage rates continue to hover at record lows this fall,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “The 30-year fixed mortgage rate remained essentially unchanged at 3.01% last week, but rates for 15-year fixed-rate loans, FHA loans, and jumbo loans all fell to new MBA survey lows. The drop in rates spurred an uptick in demand for refinances.”

Purchase loans actually decreased for the week, but only slightly.

“After a solid stretch of purchase applications growth, activity decreased for the fifth time in six weeks, but was still over 25% higher than a year ago, and has increased year-over-year for six straight months,” Kan said. “2020 continues to overall be a strong year for the housing market.”  

More in Mortgage and Housing News

  • U.S. home prices rose 1.1% between September, according to CoreLogic. Over the year, they jumped 6.7%. Prices increased the most in Miami, where they rose 11.6%. In Phoenix, they also rose more than 11% for the year.
  • The share of mortgage loans in forbearance dropped again, this time shrinking to 5.83% of all loans. According to the Mortgage Bankers Association, about 2.9 million homeowners are currently in forbearance.
  • Pending home sales fell in September, dropping 2.2%, according to the National Association of REALTORS®. Sales were down the most in the Midwest, where they fell 3.2% for the month. The Northeast region was the only area to see an increase.
  • A new survey from the National Association of Home Builders shows that homebuying competition is on the rise. The share of buyers saying they were outbid has nearly doubled in just the last three months.

This week in mortgage rates

Mortgage rates largely held steady this week, dropping slightly on most loan types.

Here’s how rates looked for each loan product:

  • Conforming 30-year, fixed-rate loans: 3.01%, 0.38 points
  • Jumbo 30-year, fixed-rate loans: 3.18%, 0.30 points
  • FHA 30-year, fixed-rate loans: 3.08%, 0.26 points
  • 15-year, fixed-rate loans: 2.55%, 0.35 points
  • 5/1 adjustable-rate loans: 2.67%, 0.52 points

Make sure to check back here next week for the latest on interest rates.

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By Aly Yale / November 6th, 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.