July 24, 2020
Category: Market Updates
Since 1971, Freddie Mac has released its weekly Primary Mortgage Market Survey which tracks average mortgage interest rates. On July 16, 2020, they announced that the average 30-year fixed-rate was just 2.98%, marking the first time in their nearly fifty years of reporting that rates have been below 3%.
The 2.98% 30-year fixed-rate mortgage was down from 3.03% just a week prior, while the 15-year fixed-rate mortgage was down to 2.48% from 2.51% the week before. Sam Khater, Freddie Mac’s Chief Economist, explained that “the drop has led to increased homebuyer demand and these low rates have been capitalized into asset prices in support of the financial markets.” Unsurprisingly, these lower rates are causing an increase in both mortgage and refinancing activity. For the week ending July 10, while 30-year rates were still just above 3%, the Mortgage Bankers Association reported that, compared to the week before, mortgage applications were up 5.1% and refinance applications were up 12%. The uptick in refinancing marked a staggering 107% increase from the same week one year ago.
Purchase applications were down the week over but still 15% higher than they were a year prior. Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting noted that “purchase activity remains relatively strong, despite the continued economic uncertainty and high unemployment caused by the ongoing pandemic.” While purchases may be down slightly, homeowners are jumping at the opportunity to secure new lower rates for their mortgages. In fact, refinancing made up 64.2% of all mortgage applications compared to 60.1% the week before. Out of all the activity, only 3% of applications were for adjustable-rate mortgages.
With rates hitting all-time lows, it may be time to consider buying a home or refinancing your current mortgage. Contact one of our Loan Officers today to explore your options!