Overall applications dip, led by refinances
Mortgage applications overall slipped 0.3% in the week ending Nov. 13, the Mortgage Bankers Association (MBA) reported Wednesday.
Requests for refi loans fell 2% compared to the previous week, but were still up a staggering 98% compared to the same time last year. Refinance mortgages accounted for 69.8% of total applications, slightly less than the previous week’s 70%.
“The average refinance loan balance of $291,000 last week was the lowest since January,” notes Joel Kan, the MBA’s forecaster. “Many borrowers with higher loan balances may have acted earlier on in the current refinance wave.”
But lots of homeowners are still on the sidelines. Some 18.5 million mortgage holders are in a good position to refinance and save around $300 monthly, the mortgage data firm Black Knight said earlier this month. The researchers say 2.5 million could even save $500 or more every month by refinancing.
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.
Mortgage rates edge higher
Mortgage rates have ticked up to 2.99%, according to the MBA’s weekly survey, up slightly from the previous week’s 2.98%.
After months of historic lows, rates could be starting to climb. They already jumped sharply after drug company Pfizer announced an effective COVID-19 vaccine could be just months away.
Low rates are continuing to lure buyers into the housing market. Applications for new mortgages — called “purchase loans” — spiked last week.
“The purchase market recovered from its recent weekly slump, with activity increasing 3 percent and climbing above year-ago levels for the 26th straight week,” says Kan.
“Housing demand remains supported by the ongoing recovery in the job market, and an increased appetite from households seeking more space because of the pandemic,” he adds.
Whether you’re buying or refinancing, compare a minimum of five rate quotes to find the lowest mortgage rate possible for someone in your area and with your credit profile. Studies have found you can save thousands of dollars by getting at least five mortgage offers.
Use those same comparison shopping skills to buy your homeowners insurance at the best possible rate.