- Applications for refinancing increased by 26% last week.
- 15% more mortgage applications
According to the Mortgage Bankers Association, the number of refinance applications increased 26% last week compared to the week before. Mortgage applications as a whole increased by 15.1%. After the Fed dropped interest rates by 0.50% and 10-Year U.S. Treasury yields went below 1% for the first time yesterday, these numbers are anticipated to increase.
This may provide a fantastic opportunity for anyone seeking to refinance or purchase a house at a cheaper interest rate, as well as a boost to the housing market and the stocks of homebuilders. Over 500,000 searches for “Mortgage Rates” were made on Google in the United States yesterday.
According to FreddieMac, the typical 30 Year Mortgage Rate for the week ending February 27 was 3.45%. This number is quite close to the record-low recorded in November 2012 of 3.31%. The decline in interest rates has benefited American homebuilder stocks, which are among the few equities to increase amid a week of intense volatility and selling. In contrast to the S&P500’s 2.5% loss during the previous five days, the ITB ETF, which tracks US homebuilders, has marginally increased.
According to Mike Fratantoni, senior vice president and chief economist at the MBA, “the 30-year fixed rate mortgage fell to its lowest level in more than seven years last week, amidst growing concerns regarding the economic impact of the coronavirus spread as well as the tremendous financial market volatility.” We anticipate that refinancing activity will grow even more until worries pass and rates normalize, given the continued decline in Treasury rates this week.
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