Mortgage Rates Drop Again!
Rates have come down a lot over the last two days. Last week the conforming rates were into the 6s.
The rates above are with no points, which should mean that you could get a jumbo rate in the mid-4s!
Updated: Boston Real Estate Blog 2022
Mortgage Rates Drop Again!
- The average rate on the 30-year fixed dropped just 1 basis point for the week, but saw a wide swing from the beginning of the week to the end of it.
- Refinance demand surged 9% last week from the previous week.
- Homebuyer demand for mortgages fell 5% after four straight weeks of gains.
A brief drop in mortgage rates, due to the first news of the omicron variant, caused mortgage refinance demand to rise dramatically last week. But it will likely be short-lived.
The rate drop wasn’t all that dramatic when looking at the weekly average of the 30-year fixed. For loans with conforming loan balances ($548,250 or less), it fell to 3.30% from 3.31%, with points decreasing to 0.39 from 0.43 (including the origination fee) for loans with a 20% down payment, according to the Mortgage Bankers Association.
Again, that was the average. Rates had dropped sharply at the end of the previous week and then stayed there through last Tuesday before starting to climb again Wednesday.
It was, however, enough time to cause a 9% jump in refinance applications week to week, seasonally adjusted. They were still 37% lower than the same week one year ago. Mortgage rates were 40 basis points lower at this time last year.
Government (FHA) refinance demand saw an outsized 20% weekly increase. The refinance share of mortgage activity rose to 63.9% of total applications from 59.4% the previous week.
“While the 30-year fixed mortgage rate and 15-year fixed mortgage rate both declined only one basis point, the FHA rate fell 7 basis points, driving the surge in government refinances. Borrowers are continuing to act on these opportunities, but if rates trend higher as MBA is forecasting, the window of opportunity to refinance will continue to get smaller,” said Joel Kan, an MBA economist.
Mortgage applications to purchase a home, which are less sensitive to weekly rate changes, decreased 5% for the week and were 8% lower than the same week one year ago. This after four consecutive weeks of gains.
“Activity is still close to the highest level since March 2021, which is a positive sign as the year comes to an end,” said Kan. “Purchase activity continues to be constrained by a lack of inventory, combined with rapid rates of home-price appreciation and mortgage rates higher than in 2020.”
Mortgage rates continued to climb higher this week, now up 11 basis points from a week ago, according to Mortgage News Daily. Mortgage rates loosely follow the yield on the 10 year U.S. Treasury.
“While plenty of uncertainty remains, there are more headlines regarding ‘lower severity’ of covid symptoms in omicron cases. Investors have rushed back into the stock market as a result, and bonds have suffered,” wrote Matthew Graham COO of Mortgage News Daily.
Mortgage Rates Drop Again!
WASHINGTON (AP) — Mortgage rates were flat to lower this week, with the average for the key 30-year home loan below 3% for the sixth straight week.
Uncertainty over the surging delta coronavirus variant and its potential effect on the U.S. economic recovery remained as a backdrop suppressing mortgage rates.
Mortgage buyer Freddie Mac reported Thursday that the average for the 30-year mortgage fell to 2.77% from 2.80% last week. The benchmark rate, which reached a peak this year of 3.18% in April, stood at 2.88% a year ago.
The rate for a 15-year loan, a popular option among homeowners refinancing their mortgages, remained at a historically low 2.10%.
Concerns have been mounting in global financial markets around the delta variant’s spread in the U.S., Europe and Asia, and especially in China, which is on high alert as it confronts hundreds of fresh cases.
China has sealed off residential communities, suspended flights and trains, and ordered mass coronavirus testing in Wuhan, the city where the disease was first detected in late 2019. Although China’s numbers are small compared with outbreaks elsewhere, its containment strategies and the subsequent impact on its large economy are being closely watched.
In the latest evidence of a briskly rebounding U.S. economy and job market, the government reported Thursday that the number of Americans applying for unemployment benefits fell last week by 14,000, to 385,000. Benefits applications have mostly fallen steadily since topping 900,000 in early January. Still, they remain high by historic levels.
- The average contract interest rate for 30-year fixed-rate mortgages decreased to 3.15% from 3.17%.
- Applications for a mortgage to purchase a home were essentially flat from the previous week and 24% lower than one year ago.
Mortgage rates fell slightly
Mortgage rates fell slightly last week, but not enough to light a fire under mortgage demand.
Total mortgage application volume decreased 3.1% for the week, according to the Mortgage Bankers Association’s seasonally adjusted index.
While rates fell slightly, they were not as low as the record levels we saw last fall, and that is why refinancing demand is not responding. Refinance applications fell 5% last week and were 27% lower than a year ago. The refinance share of mortgage activity decreased to 60.4% of total applications from 61.3% the previous week.
Applications for a mortgage to purchase a home were essentially flat from the previous week and 24% lower than a year ago.
It was also the result of sky-high home prices. Fewer buyers can now afford a home. This was apparent in the average loan size for purchase applications. It fell to $407,000, below the record $418,000 set in February, but still far above 2020′s average of $353,900.
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