Homebuyers seem to be taking full advantage now that social distancing orders are being less tight across the country. According to the Mortgage Bankers Association, applications from homebuyers increased last week by 11%, marking the third consecutive week of increases.
The homebuying activity is still down 10% over the year, but that year-over-year gap is thinning out every week. The number of home buying loan applications in April was down 35% annually.
According to Joel Kan, MBA’s Associate Vice President of Economic and Industry forecasting, we can expect the wave of improvement to keep on spreading.
Refinance applications have been declining in recent weeks despite record-low mortgage rates. The average rate on a 30-year, the fixed-rate loan came in at 3.43%, but refinancing activity dropped 3% this week and 2% the week prior. This is probably due to a combination of factors, including stricter lending standards, increasing unemployment, and more time-strapped lenders.
If rates continue to drop, demand for refinances may see an even bigger spike. According to a report from Bloomberg, mortgage rates could drop below 3% in the coming weeks—well below the lowest point on record. This could add serious incentives for homeowners to refinance.
According to the recent Mortgage Monitor report from real estate analytics firm Black Knight, if rates drop to just 3%, more than 19 million homeowners could shave at least 0.75% off their mortgage rate.
This could mean a difference of around $80 per month and nearly $1,000 per year on a $250,000 home.
Full article on forbes.com