New homes are for sale in Cold Spring, Nevada’s Woodland Village, which is being built by Lifestyle Homes housing developer.
Andri Tambunan | AFP | Getty Images
It seems it took a few weeks for current homeowners to realize that mortgage rates had dropped significantly. When they do, they take action.
Home loan refinancing applications surged 35% last week from the previous week, according to the Mortgage Bankers Association’s Seasonally Adjusted Index. That’s a 118% increase compared to the same week a year ago.
While the average contract interest rate for a 30-year fixed-rate mortgage with a conforming loan balance ($766,550 or less) fell slightly, from 6.55% to 6.54%, points dropped from 0.58 to 0.57 (including the origination fee) with a 20% down payment. A 20% down payment loan with 20% down payment.
While interest rates fell just 1 basis point last week, they have fallen 33 basis points over the past four weeks. It was also 62 basis points lower than the same period last year.
“The refinance index also had its strongest week since May 2022, driven by increases in conventional loan, FHA and VA applications,” MBA economist Joel Kan said in a release. “
Mortgage applications for home purchases rose just 3% this week, still 8% lower than the same week a year ago. Homebuyers today face more than just high interest rates. They still face pressure from high housing prices and low supply. Brokers say some buyers also sense mortgage rates may fall further, so they’re waiting before making such a large purchase.
The refinance share of mortgage activity increased to 48.6% of total applications from 41.7% the previous week. A year ago, refinancing volume accounted for only 29% of total applications.
Mortgage rates started the week essentially flat, but that could change with the release of the government’s monthly inflation report, the Consumer Price Index (CPI).
Matthew Graham, chief operating officer of Mortgage News Daily, wrote: “We have no way of knowing ahead of time whether the data will be helpful or harmful, only that the Consumer Price Index (CPI) will cause the decline in the past few years. The reason for some of the biggest fluctuations in .
