Mortgage Rates Hit New Lows

Published by peter | Filed under Market Trends

Driven by a whirlwind of refinancing and decades-low rates, mortgage activity was up about 3 percent based on the Mortgage Bankers Association survey for the week ended March 27.

The four-week moving average for mortgage activity is up 16 percent, with purchases up 3 percent and refinancings up 20 percent. Real estate analyst Jack McCabe reports some mortgage brokers are “overwhelmed by the rush of business,” especially since many firms have laid off experienced staff, while many of their competitors have closed. “The brokers are telling me that if they had more help they’d be able to process more refinancing applications and answer more queries,” he said.

One major financial institution is passing on as many as 700 inquiries a day to any mortgage brokers who will follow up the leads, said a 25-year real estate appraiser, who asked to remain anonymous. “They used to pay $10 apiece to get these leads, and now they’re giving them away for free because they don’t have the staff to handle them,” the appraiser said. The anecdotal reports underline the MBA data that more than 79 percent of all new mortgage applications were for refinancing, up slightly week-to-week, while rates for the fixed-rate 30-year, 15-year and adjustable-rate mortgage all declined to new lows.

Last week, the average rate on the 30-year fixed-rate mortgage fell to 4.61 percent from 4.63 percent, based on an 80 percent loan-to-value ratio. Points, including the origination fee, dropped to 1.03 from 1.13 during the previous week. The 30-year fixed-rate mortgage carries the lowest rate since the MBA began its weekly surveys. The 15-year fixed-rate mortgage dropped to 4.45 percent from 4.48 percent and the one-year adjustable-rate mortgage decreased to 6.2 percent from 6.22 percent the preceding week. The MBA weekly survey covers about 50 percent of all U.S. retail residential mortgage applications, and has been conducted since 1990. Respondents include mortgage bankers, commercial banks and thrift institutions.  - TBBJ