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Refinancing Boosts Mortgage Demand

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Financing

Refinancing Boosts Mortgage Demand


November 4, 2020
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Photo: chinnarach

The Mortgage Bankers Association’s seasonally adjusted index found an increase in mortgage demand last week, fueled by record low rates for large loans and low downpayment loans. Compared to the week prior, mortgage application volume increased by 3.8%. CNBC says refinancing has boosted mortgage demand, which is 88% higher annually and increased by 6% week over week. The most popular loan type, the 30-year fixed, saw no significant change while jumbo loans, FHA loans, and 15-year fixed loans set record lows. 

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.01% from 3.00%, with points increasing to 0.38 from 0.35 (including the origination fee) for loans with a 20% down payment.

Potential homebuyers are still pulling back, despite low interest rates. Mortgage applications to purchase a home fell 1% for the week but were 25% higher annually. Purchase mortgage demand has been falling pretty steadily over the past month, as home prices set new record highs and the supply of homes for sale is still incredibly lean.

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