Refinancing: Hard-to-Resist Mortgage Rates Fuel a New Wave
A mortgage professional association that performs a weekly survey has found a rise in both types of mortgages, refinances and purchase mortgages. Rates may rise soon, so many borrowers are rushing to take advantage of the rates — which remain near historic lows.
Current averages rates from the Freddie Mac Primary Mortgage Market Survey: 30-year fixed-rate mortgage (FRM) — 2.87 percent; 15-year FRM — 2.17 percent.
What Are the Rates Right Now?
Here are the current mortgage rate averages from the just-released weekly Freddie Mac Primary Mortgage Market Survey (PMMS):
30-year fixed-rate mortgage (FRM) — 2.87 percent (down 0.04% year-over-year)
15-year FRM — 2.17 percent (down 0.29 percent YOY)
5/1-year adjustable-rate mortgage (ARM) — 2.42 percent (down 0.49 percent YOY).
Keep in mind that a year ago the rates were incredible too, compared against 50 years of federal mortgage data within the PMMS. These rates are just a little better.
Growth in Refinance Activity
During the week ending August 20, mortgage applications grew 1.6 percent week-over-week (WOW), according to the Mortgage Bankers Association (MBA) in its latest weekly report. Purchase mortgage applications, while still down 16 percent year-over-year (YOY), were up 3 percent WOW. Meanwhile, after dropping 5 percent the prior week, refinance applications rose 3 percent YOY and 1 percent WOW.
During the week ending August 20, mortgage applications were up 3 percent year-over-year (YOY), per the Mortgage Bankers Association.
What Caused the Great Rates Behind the Current Refi Wave?
MBA Vice President of Economic and Industry Forecasting Joel Kan noted that treasury bond interest rates and the pandemic were ultimately behind the flurry of new refinance activity. He explained in a press release that the increase in COVID-19 cases in some states led to a drop in treasury yields. In turn, the mortgage rates dropped a bit.
Why Have Fewer Than 1 in 5 Homeowners Refinanced?
According to an August 2021 mortgage industry study, fewer than 1 in 5 homeowners have refinanced, despite average interest rates that have hovered near all-time lows for well over a year. There are various reasons why people have hesitated to move forward with refinances, including credit concerns and simply being busy with other things.
One huge reason people haven’t refinanced, though, is not knowing how amazing current rates are. You first have to know your current rate to know how much today’s rates could improve your picture. The truth is that nearly 2 in 5 mortgage borrowers, 38%, do not know their current interest rate, according to another report on the same study cited above.
Are you considering a refinance? Now is the time! At Best Advantage Mortgage, we work with several trustworthy lenders, matching you with the right one so we can tailor your loan to your needs. Get your best rate!