Category Archives: Interest Rates

Mortgage Rates Drop To Near Record Lows

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell to their lowest level in more than three years last week. And, in the case of jumbo loans, rates fell to lows not seen since 2011. Michael Fratantoni, MBA’s chief economist, told CNBC that financial market volatility is behind the rate drop. “Mortgage rates have been low for years, but the impact of Brexit has brought us close to record lows once again, with jumbo rates already at their lowest levels, giving more borrowers a larger incentive to refinance,” Fratantoni said in reference to Britain’s exit from the European Union. In fact, refinance activity – which is more sensitive to rate fluctuations – surged last week, climbing 21 percent from the week before. With rates down across all loan categories, including FHA loans and 15-year fixed-rate mortgages, that’s no surprise. Purchase activity also benefited from falling mortgage rates. The seasonally adjusted purchase index was up 4 percent and is now 23 percent higher than the same week one year ago. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.


Mortgage Rates At Lowest Level In 3 Years

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell to their lowest level in three years last week. In fact, rates for 30-year fixed-rate mortgages with conforming loan balances dropped to levels last seen in May 2013. Rates for jumbo loan balances were also down, falling lower than they’ve been since January 2011. Lynn Fisher, MBA’s vice president of research, says mortgage rates declined due to concerns about events in Europe. “Rates fell on concerns that Britain may vote to leave the European Union later this week. Although beliefs about the likelihood of an exit have since moderated, the ‘Brexit’ vote promises to bring continued volatility to markets,” Fisher told CNBC. Because of the rate drop, refinance activity – which is more sensitive to rate fluctuations – rose 7 percent from the previous week. Purchase demand, on the other hand, slipped 2 percent from one week earlier. Still, overall demand for mortgage applications is now 35 percent higher than it was at the same time last year. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.


Mortgage Rates At Lowest Level In A Year

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were mostly flat last week. In fact, rates for 30-year fixed-rate loans with both conforming and jumbo balances were unchanged from one week earlier while rates for loans backed by the Federal Housing Administration and 15-year fixed-rate mortgages dropped. By the end of the week, average rates were as low as they’d been in nearly a year. That didn’t spur demand for mortgage applications, however, which fell 1.6 percent from the week before. Joel Kan, MBA’s associate vice president of industry surveys and forecasting, told CNBC that the declining demand for home purchase loans was mostly seen at the higher end of the market. “Purchase applications jumped up during the first full week of April and had effectively remained at that level, on an unadjusted basis, before falling this week,” Kan said. “The seasonally adjusted purchase index decreased to the lowest level since February, led by declines in applications for larger home purchase amounts.” Purchase volume was still almost 12 percent higher than one year earlier, despite the decline in jumbo loans. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.


Are Low Rates Offsetting Higher Home Prices?

With home prices largely recovered from the crash, affordability is once again a concern for the average American home buyer. In fact, there has been a lot of discussion recently about whether higher prices will lead to a drop in buyer demand or if still low mortgage rates and a better job market will help keep demand high and affordability conditions favorable. According to Black Knight Financial’s latest Mortgage Monitor, demand is still healthy but home price increases have begun to cut into the amount of savings buyers can expect from historically low rates. For example, without factoring in home price movement, recent mortgage rate declines would be saving buyers approximately $44 a month on their monthly payment. However, when including the rate of price gains, that savings falls to $18. Ben Graboske, Black Knight’s data and analytics SVP, says home prices are muting the effect low mortgage rates are having on housing affordability. “By and large, borrowers are still seeing net reductions in monthly payments across the country heading into the early home buying season,” Graboske said. “In some areas though, prices are appreciating so quickly that they may have fully offset any savings from rate declines.” However, declining mortgage rates have had a positive impact on housing affordability. According to Graboske, without falling rates, buyers would have been paying an additional $28 a month for the median-priced home compared to the end of last year. More here.