Refis, Mortgage Rates Drop, While Purchase Loans Rise

Mortgage Interest Rates Drop

Despite a drop in mortgage rates this week, overall mortgage activity declined 6.5% over the previous week. According to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA), refinance activity dipped 10% — its lowest level since July. 

Purchase activity held strong, though, rising 0.4% for the week.

“The home purchase market remains a bright spot for the overall economy, said Joel Kan, associate vice president of economic and industry forecasting for MBA. “Purchase applications were essentially unchanged but were 33% higher than a year ago — the 14th straight week of year-over-year gains. Mortgage rates at record lows and households looking for more space are driving this summer’s surge in demand.”

The average mortgage rate on 30-year, fixed-rate loans came in at 3.11% — down slightly from last week’s 3.13%. Rates on jumbo and FHA loans held steady, while 15-year, fixed-rate loans saw rates dip from 2.73% to 2.70%.

More in Mortgage and Housing News

  • The Federal Housing Finance Agency announced that it would wait to implement its new “Adverse Market Refinance Fee” until December 1, instead of the September 1 date previously planned. The agency also set a $125,000 threshold for the fee, exempting loans under that minimum from the 0.5% charge.
  • The number of mortgage loans in forbearance fell to 7.2% this week, down slightly from the 7.21% seen last week. About 3.6 million homeowners are currently in forbearance. 
  • LendingTree released its listing of the most competitive homebuying markets, and San Jose, California, took the cake. According to the data, nearly 86% of homebuyers have a credit score of 720 or higher, and most put down a 25% down payment. Raleigh, North Carolina, and Pittsburgh took spots two and three on the list.

This week in mortgage rates

For the most part, mortgage rates either dropped or held steady this week. The one exception was 5/1 ARMs, which saw an increase from 2.95% to 3.14%. 

Here’s a look at how rates looked for the week:

  • All 30-year, fixed-rate loans: 3.11%, 0.38 points
  • Jumbo 30-year, fixed-rate loans: 3.41%, 0.35 points
  • FHA 30-year, fixed-rate loans: 3.16%, 0.29 points
  • 15-year, fixed-rate loans: 2.70%, 0.39 points
  • 5/1 ARMs: 3.14%, 0.42 points

Be sure to check back next week for the latest mortgage rates.

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By Aly Yale / August 28th, 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.