A pair of new reports found that mortgage rates for a 30-year fixed loan are back near all-time lows, driving refinancing activity once again.
Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 10 found that 30-year fixed rates fell to 3.45 percent, the lowest level in MBA’s two decade survey history.
Meanwhile, Freddie Mac reported that for the week ending April 16, its Primary Mortgage Market Survey found 30-year rates averaged 3.31 percent.
“Mortgage rates continue to hover near all-time lows for the third straight week. As a result, refinance activity remains high, but home purchase demand is weak due to economic tightening,” Freddie Mac Chief Economist Sam Khater said in a release.
Mortgage News Daily reported that 30-year rates touched 3.25 percent April 9, its lowest levels in a month. After a week of fluctuations they were at 3.38 percent April 176.
Freddie Mac said that a year ago at this time, the 30-year rate averaged 4.17 percent.
“While new monthly economic data are driving markets lower this week, they are a lagging indicator and should be priced in already,” Khater said. “Real time daily economic activity metrics suggest that the economy will likely not decline much further. Going forward, the key question is no longer the depth of the economic contraction, but the duration.”
MBA reported that the record-low mortgage rates lifted applications 7.3 percent from the previous week.
“Refinance activity has experienced a volatile four-week period, but did increase 10 percent last week. Refinancing will continue to be beneficial for the many borrowers able to lower their monthly payments during this time of economic distress,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting.
MBA reported that the refinance share of mortgage activity increased to 76.2 percent of total applications from 74.2 percent the previous week. Refis were up 192 percent year-over-year, even as purchases were down 35 percent year-over-year.
“Compared to the first week of March, the purchase index was down around 35 percent, as the economic downturn and nationwide mitigation practices to slow the spread of COVID-19 have disrupted the spring homebuying season,” Kan said. “The purchase market is still expected to rebound, as long as the public health measures to reduce the pandemic’s spread are successful and result in a broader recovery.”