Many homeowners have, as mortgage rates continue to drift lower
of ConsumerAffairs
If you have a 3% mortgage rate, you probably arent eager to refinance at todays rates. But if you bought a home recently with a mortgage rate over 7%, you might want to look at todays rates, which are still trending lower.
Plenty of current homeowners have. The Mortgage Bankers Association (MBA) reports applications to refinance mortgages surged by 35% last week. Refinance applications last week were 118% higher than the same week in 2023.
Rates on both 30- and 15-year fixed-rate mortgages decreased for the second consecutive week, and combined with the previous weeks rate moves, spurred another strong week for application activity as borrowers with higher rates took the opportunity to refinance, said Joel Kan, MBAs vice president and deputy chief economist.
Overall mortgage applications increased almost 17% to the highest level since January 2023, largely due to homeowners who are refinancing. Refinancing activity saw its strongest week since May 2022.
Additionally, purchase applications increased by 3%, with small gains seen across the various loan types, indicating that prospective homebuyers are slowly reentering the market, Kan said.
Current rates
According to MBA, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.54% from 6.55%, with points decreasing to 0.57 from 0.58 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $766,550) increased to 6.78 percent from 6.77 percent, with points decreasing to 0.37 from 0.50 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 6.49 percent, with points decreasing to 0.77 from 0.79 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
Industry analysts say they expect mortgage rates to trend lower, especially since the latest Consumer Price Index (CPI) suggests inflation is cooling.
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Posted: 2024-08-14 15:42:15
