Mortgage Rate Drop Spurs Applications Rebound
According to the Mortgage Bankers Association's Weekly Applications Survey, average mortgage rates fell last week from the week before. Rates were down for 30-year fixed-rate mortgages with conforming loan balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The decline followed two straight weeks of increases and led to a rebound in demand for mortgage applications. In fact, refinance activity surged, climbing 26 percent from one week earlier. Joel Kan, MBA's associate vice president of economic and industry forecasting, said the coronavirus is behind the volatility over the past few weeks. “Mortgage rates and applications continue to experience significant volatility from the economic and financial market uncertainty caused by the coronavirus crisis,” Kan said. “After two weeks of sizeable increases, mortgage rates dropped back to the lowest level in MBA's survey, which in turn led to a 25 percent jump in refinance applications.” However, though refinance demand skyrocketed, purchase applications were down from the previous week. The MBA's survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.