Everyone is refinancing.
Mortgage applications increased 55.4 percent last week from a week earlier, driven by overwhelming demand to refinance, the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. More than 76 percent of those applications came from homeowners seeking to refinance.
“Market uncertainty around the coronavirus led to a considerable drop in U.S. Treasury rates last week. … Homeowners rushed in, with refinance applications jumping 79 percent – the largest weekly increase since November 2008,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
The 30-year fixed rate is at its lowest level since 2012.
Other findings in the report include:
- The Market Composite Index, a measure of mortgage loan application volume, increased 55.4 percent on a seasonally adjusted basis from one week earlier to the highest level since April 2009.
- The Refinance Index increased 79 percent from the previous week to the highest level since April 2009 and was 479 percent higher than the same week one year ago.
- The seasonally adjusted Purchase Index increased 6 percent from one week earlier.
With the change in interest rates, MBA forecasts total mortgage originations to come in around $2.61 trillion this year – a 20.3 percent gain from 2019 ($2.17 trillion). Refinance originations also are expected to double earlier MBA projections, jumping 36.7 percent to around $1.23 trillion. Purchase originations are now forecasted to rise 8.3 percent to $1.38 trillion.
Read the full MBA report here.