Coronavirus Pushes Interest Rates Down, Sparking Rise in Mortgage Applications

If anyone doubts the impact of foreign affairs, point to the mortgage rates this week. They dropped to their lowest level since November with the dip originating not in Washington D.C., but in a fish market in Wuhan, China. Due to investor uncertainty surrounding the coronavirus, rates plunged as experts gauge the severity of the outbreak. In turn, the mortgage application volume increased by 7.2 percent in a week, and applications to refinance a home were 146% higher than this time last year as people rushed to lock in the low rates. As the outbreak plays out on the world stage, the Federal Reserve will continue to monitor the situation, and depending on what happens, next week’s rates could go in either direction. 

Mortgage rates fell to their lowest level since November, and that sent current borrowers and potential homebuyers rushing to their lenders.

Overall mortgage application volume jumped 7.2% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. The week’s results include an adjustment for the Martin Luther King Jr. holiday.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.81% from 3.87%, with points increasing to 0.28 from 0.27 (including the origination fee) for loans with a 20% down payment.

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