Homeowners are celebrating historically low mortgage rates with the number of refinance applications jumping 79% in the first week of March to the highest level since April 2009, according to the Mortgage Bankers Association.
The figures compare to 66% a week ago, and are nearly six times higher compared to the same week last year. On the back of this, the Mortgage Bankers Association has nearly doubled its 2020 estimates for total refinances to around $1.23 trillion, a 37% increase from 2019 and the strongest finance volume since 2012. Now really is the time to look up one of the best refinance mortgage companies, and see if you can better your rate.
"Market uncertainty around the coronavirus led to a considerable drop in U.S. Treasury rates last week, causing the 30-year fixed rate to fall and match its December 2012 survey low of 3.47%. Homeowners rushed in, with refinance applications jumping 79% - the largest weekly increase since November 2008," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.
"The purchase market also had a solid week, with activity nearly 12% higher than a year ago. Prospective buyers continue to be encouraged by improving housing inventory levels in some markets and very low rates."
Mortgage rates dropping
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to the lowest level in more than seven years and the lowest in survey history, falling to 3.47% from 3.57% with points increasing to 0.27 from 0.26 (including the origination fee) for loans with a 20% down payment. The best mortgage lenders in the US are seeing good business in 2020.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) decreased to the lowest level since the series was added in 2011, to 3.58% from 3.63% with points decreasing to 0.20 from 0.21 (including the origination fee) for loans with a 20% down payment.
Kan said: "As lenders handle the wave in applications and manage capacity, mortgage rates will likely stabilize but remain low for now. This in turn will support borrowers looking to refinance or purchase a home this spring."
The MBA is forecasting the 30-year rate to remain between 3.3% and 3.4% for the rest of the year, which will lead to increased refinance activity.