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Mortgage Rates Rise, Reacting to Refinance Rush

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Mortgage Rates Rise, Reacting to Refinance Rush

March 13, 2020
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By phonlamaiphoto

As measures to slow the spread of the coronavirus intensify and investors flee the stock market, one might assume that mortgage rates would plunge further. But on Thursday, the 30-year loan mortgage rate defied expectations, rising to 3.36 percent from a previous 3.39 percent. The move comes as a deterrent to refinancers as lenders struggle to keep up with the rates bonanza: Refinancing applications climbed 79 percent from last week, which spurred the Mortgage Bankers Association to double its previous volume forecast for 2020. But as the pandemic puts pressures on the travel and tourism industries and continues to rock the market, the future path of rates is uncertain.

Mortgage rates for the popular 30-year loan rose, according to data released by Freddie Mac on Thursday, reflecting lenders’ move to tamp down an avalanche of applications from homeowners seeking to refinance.

Investor uncertainty over the novel coronavirus pandemic sent mortgage rates plunging to their lowest levels on record last week, spurring heightened activity among house hunters seeking loans and especially homeowners seeking to refinance.

Refinancing applications soared 79 percent from the previous week, according to the Mortgage Bankers Association (MBA). The flurry of interest prompted the association to double its previous forecast of volume for refinancing to $1.23 trillion for 2020.

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