Mortgage rates dropped yet again last week and helped trigger a 7.2% rise in home loan applications. The traditional Spring buying season appears to have started early in 2020, with mortgage applications to buy a new home jumping by 5% for the week ending January 24, 2020 and by 17% year-on-year. Refinance demand was also up by 8% over the same period, a huge 146% increase compared to the same time in 2019.
According to the latest data from the Mortgage Bankers Association, the current average rate for a 30-year fixed-rate mortgage with a conforming loan balance (stipulated as $510,400 or less) is now just 3.81% – down from 3.87% the previous week and the lowest figure the market has seen since November 2016.
However, while demand for new homes in soaring, many real estate experts note that supply is limited, so be sure to check out the best mortgage lenders (opens in new tab) without delay to capitalize on these great rates. Alternatively, those looking to improve the terms of an existing home loan can take advantage of the current situation by turning to one of the best refinance mortgage companies (opens in new tab).
Coronavirus fears contribute to mortgage rate drop
Joel Kan, the MBA's Associate Vice President of Economic and Industry Forecasting, ventured that last week's dramatic drop in mortgage rates was partly down to the economic impact of the coronavirus outbreak.
“Mortgage applications continued their strong start to the year, as borrowers acted on the drop in mortgage rates last week. Rates were driven lower by investors’ increased concern about the economic impact from China’s coronavirus outbreak, in addition to existing concerns over trade and other geopolitical risks," commented Mr Kan in a statement.
However, while current mortgage rates are highly favorable for new buyers and refinancers, it's worth remembering that there are a number of different types of mortgages, including some you may be less familiar with.
For instance, one of the best reverse mortgage companies might actually offer the most appropriate arrangement for your needs, while there are also plenty of mortgages for bad credit if your present financial situation is quite what you'd like it to be. The next batch of mortgage date is due in Wednesday, February 5th, but in the meantime you can find the absolute latest mortgage rates at LendingTree.
Compare mortgage rates at LendingTree (opens in new tab)
LendingTree is a marketplace where you invite mortgage & refinance lenders to come to you. It is a great place to start your search, as it has a large selection of lenders that offer competitive rates and terms.