Mortgage rates have been dropping now for twelve weeks in a row. The last week of November was no exception. Mortgage applications increased 3.9% in volume the last week of November according to the Mortgage Bankers Association’s seasonally adjusted index.
“Weekly mortgage rate volatility has emerged again, as markets respond to fiscal policy uncertainty and a resurgence in Covid-19 cases around the country,” said Joel Kan, MBA’s associate vice president of industry and economic forecasting.
Refinance applications rose 5% which was the highest since last April. The volume of refinancing was 79% higher than this time last year. In fact, refinance was 71.1% of the total mortgage activity. According to Black Knight, a mortgage technology and data provider, today’s average mortgage rate is about a full percentage point lower than it was a year ago.
The average contract interest rate for 30-year-fixed-rate dropped to 2.92% with the points falling to 0.35 for loans with a 20% down payment. Even with the higher home prices, buyers are still on the winning side with such low rates. Mortgage applications to purchase a home were 19% higher than this time last year.
“Amidst strong competition for a limited supply of homes for sale, as well as rapidly increasing home prices, purchase applications increased for both conventional and government borrowers. Furthermore, purchase activity has surpassed year-ago levels for over six months,” Kan said.
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