Mortgage Rate Drop Pushes Demand
According to the Mortgage Bankers Association's Weekly Applications Survey, average mortgage rates fell last week across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The drop caused a slight increase in overall mortgage demand, with refinancing and purchase activity combining for a 1.5 percent improvement over the week before. Mike Fratantoni, MBA's senior vice president and chief economist, says the coronavirus will have an impact on markets in the coming weeks. “As fears regarding the coronavirus have increased, Treasury yields have dropped to record lows this week amid the ensuing financial market volatility,” Fratantoni said. “Next week's results will show the impact this drop in Treasuries had on mortgage activity.” Also in the report, purchase activity rose 6 percent last week, which puts demand 10 percent higher than last year at the same time. The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.