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Low rates are triggering a refinance boom as homeowners rush to lock in a better deal than their current mortgages. Applications jumped 79 percent this week and 479 percent from this time last March, showing just how much can change in a year. On the other hand, however, the low rates are not stirring up new mortgage applications as much as builders would hope. Instead, market volatility and coronavirus concerns may be slowing a potential buyer’s jump into a long-term deal. But those factors are not holding refinancers back: If someone already has a home, they have little to lose from negotiating a lower rate.
Another major drop in mortgage rates caused a massive jump in borrowers applying to refinance their home loans.
The surge sent total mortgage application volume up 55.4% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 192% higher annually.
Refinance applications rose a whopping 79% for the week and were 479% higher than a year ago. That was the highest level of refinancing since April 2009. Falling mortgage rates over the past several weeks generated an unexpected refinance boom, but last week, when rates fell even more sharply due to deep market concerns over the coronavirus, the news clearly resonated with borrowers. The refinance share rose to 76.5% of total applications from 66.2% the previous week.
