A flood of new refis

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Mortgage applications rose 3.9% in the week ending Nov. 20, led by a 5% jump in refinance applications, the Mortgage Bankers Association (MBA) reported on Wednesday.

"The ongoing refinance wave has continued into November,” says Joel Kan, the MBA’s forecaster. “Both the refinance index and the share of refinance applications were at their highest levels since April, as another week of lower rates drew more conventional loan borrowers into the market."

Last week’s refi requests were 79% higher than the same week one year ago, and increased to 71.1% of total mortgage applications, up from 69.8% the previous week.

Even as refinancing spikes, millions of homeowners have yet to join the party. More than 19 million mortgage holders could pocket savings averaging $309 per month by refinancing now, the mortgage technology and data provider Black Knight reported last week.

“Mortgage rates remain at record lows and while that has fueled a refinance boom, it's been driven mainly by higher income borrowers,” notes Sam Khater, chief economist at the mortgage giant Freddie Mac. “Lower- and middle-income borrowers are leaving money on the table by not taking advantage of low rates.”

Good refi candidates — those with a solid credit score and at least 20% home equity — may need to hurry to lock in one of the best rates while they're still available.

Rates linger at all-time low

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Mortgage rates are unchanged this week, after dropping to an unthinkable 2.72% for a 30-year fixed rate loan, Freddie Mac said on Wednesday.

Rates have stayed at their lowest since Freddie Mac began doing its weekly survey in 1971.

Mortgage rates initially popped when drugmaker Pfizer announced encouraging news about its coronavirus vaccine, as investors began imagining an economy returning to normal. But the increase was just a blip, as COVID infections soared, lockdowns returned across the country, and the government remained at an impasse over new relief measures.

“Weekly mortgage rate volatility has emerged again, as markets respond to fiscal policy uncertainty and a resurgence in COVID-19 cases around the country,” says MBA’s Kan.

Rates on other popular mortgages also are at or near near record lows, the Freddie Mac survey shows.

The average for a 15-year fixed-rate mortgage is unchanged at an all-time-low 2.28%. Those mortgages, often used for refinance loans, remain much cheaper than they were last year, when the average was 3.15%.

Rates on 5/1 adjustable-rate mortgage, or ARMs, have surged this week to an average 3.16%, from 2.85% last week.

An unseasonably warm housing market

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Months of dirt-cheap mortgages have had homebuyers stampeding into the housing market. Applications for new mortgages — called “purchase loans” — climbed 4% last week and are sitting 19% higher than this time last year, the MBA says.

Sales of new homes in October were up 41.5% from October 2019, according to a new report from the Commerce Department.

“Builders have benefited from a lack of existing home supply and aim to ramp up their own production as prices have risen,” says Danielle Hale, chief economist at Realtor.com.

Whether you’re a homebuyer, or are a homeowner looking to refinance your existing mortgage, experts recommend that you gather and compare at least five mortgage offers to find the best deal — because rates can vary sharply from one lender to the next.

Be sure to put those same comparison shopping skills to work when you buy or renew your homeowners insurance. Get quotes from several insurers and review them side by side, to find the lowest price for your coverage.

About the Author

Ethan Rotberg

Ethan Rotberg


Ethan Rotberg is a staff reporter at MoneyWise. His background includes nearly 15 years as a writer, editor, designer and communications professional. He loves storytelling, from feature writing to narrative podcasts. His work has appeared in the Toronto Star, CPA Canada and Metro, among others.

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