Mortgage Rates Drop to Nearly 3-Year Low, Sparking Refinancing Rush

If homeowners were thinking about refinancing, now is a great time to make the leap. The mortgage rate for 30-year fixed loans dropped 0.7 percent this week to 3.51 percent on average, which is the second-lowest rate since mid-2016. Due to the coronavirus and geopolitical concerns, investors are increasingly cautious, which in turn led to the decrease in mortgage rates. The lower rates will alleviate some of the financial pressure homeowners face: Those who refinance can take advantage of the lower rates to pay less each month on their mortgage. 

Mortgage rates on 30-year, fixed loans dropped 0.7 points this week, hitting 3.51% on average, according to Freddie Mac.

It’s the lowest rate seen since September last year—when rates hit 3.49%—and the second-lowest rate since mid-2016.

According to Joel Kan, the associate vice president of economic and industry forecasting for the Mortgage Bankers Association, the decrease was largely due to investor uncertainty surrounding the coronavirus, as well as trade-related and geopolitical concerns.

Whatever the reason, the rate drop caused an 8% uptick in refinancing activity and a 5% jump in purchase applications. Refi activity is now 146% higher than it was this time last year.

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