Mortgage Rates Creep Up, Send Homeowners Running to Refinance
Homeowners who have been hesitant to refinance their mortgages are now running as mortgage rates creeped up last week. Going from 2.86% to 2.88% last week, the average contract interest rate for 30-year fixed-rate mortgages increased enough to motivate homeowners to refinance. Mortgage applications to refinance a home loan jumped 20% last week compared to the previous week, reports CNBC. That spike was the highest level of refinancing applications since March and 93% higher than exactly one year ago. Mortgage Bankers Association’s vice president of economic and industry forecasting says the rate uptick is a result of stimulus checks and the promising future of vaccines.
Mortgage applications to purchase a home, which are less sensitive to weekly rate moves, rose 8% for the week and were 10% higher than a year ago. While demand for housing is still strong, the annual comparison was lower than it has been over the past six months, as buyers are faced with a record low supply of homes for sale and fast-rising prices. However, there was a promising sign in the numbers for first-time buyers.