Homeowners refinance at triple the rate of a year ago
The number of mortgage applications has held fairly steady. The overall volume slipped 0.3% during the week ending April 17, the Mortgage Bankers Association (MBA) reported on Wednesday.
Refinancing requests edged down 1%, the trade group says, but demand for refi loans was up 225% — more than triple — compared to the rate of a year ago.
"The refinance index dropped slightly last week but remained close to its 2013 highs," notes Joel Kan, the MBA's associate vice president of forecasting.
Homeowners are finding today's reduced mortgage rates very attractive, says Kan.
"Borrowers continue to take advantage of low rates to gain some monthly savings, which is a welcome reprieve during these tough economic times," he says.
The MBA says its survey shows mortgage rates last week remained at an all-time low for a second week, with 30-year fixed-rate mortgages averaging 3.45%.
Give the mortgage calculator below a spin and see how much you could save by refinancing into one of today's low rates.
Homeowners refi while homebuyers retreat
Refinances amounted to 75.4% of all mortgage applications last week, down from 76.2% the week before.
Refi activity has been up and down this spring, despite the benefits. According to one recent study, homeowners who refinance loans taken out just last year can cut their monthly mortgage payments by $60 a month for every $100,000 borrowed.
Meanwhile, the market for the "purchase mortgages" used by homebuyers has been fairly bleak. Applications for those loans are near a five-year low and are down 30% from a year ago.
"The pandemic-related economic stoppage has caused some buyers and sellers to delay their decisions until there are signs of a turnaround," says Kan.
Cellar-dwelling mortgage rates will help home sales recover. Mortgage giant Freddie Mac is forecasting that 30-year mortgage rates will average 3.3% throughout this year, down 3.9% in 2019.
Things are already looking up in California and Washington, two of the earlest states hit hard by the pandemic. Homebuying in those states helped lift demand for purchase loans nationwide by 2% last week, the MBA says.
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