According to the Mortgage Bankers Association’s seasonally adjusted index, mortgage rates have hit their lowest level in nearly 4 years.
The association stated that the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($832,750 or less) decreased to 6.09 percent from 6.17 percent, and points decreased to 0.53 from 0.56 (including the origination fee) for 80 percent loan-to-value (LTV) loans.
Applications to refinance a home loan increased 4% last week from the previous week and were 150% higher than the same week one year ago.
Applications for a mortgage to purchase a home dropped 5% for the week and were 12% higher year over year.
While lower mortgage rates are improving affordability, MBA stated that home prices remain slightly higher than they were at this time last year.
“Mortgage rates followed Treasury yields lower last week, with the 30-year fixed rate declining to 6.09 percent – its lowest level since September 2022. The decrease in rates was enough to drive a 5 percent increase in conventional refinance applications and a 26 percent increase in VA refinances,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.
“Purchase applications were down over the week but were 12 percent higher than a year ago, as the combination of lower rates and improving affordability conditions continue to support stronger demand than last year. The ARM share stayed above 8 percent, as ARM rates remained more than 80 basis points below conforming fixed rates. This is giving payment-sensitive borrowers or those seeking larger loans an incentive to choose this product offering.”
In President Trump’s State of the Union address, he said, “Mortgage rates are the lowest in four years and falling fast, and the annual cost of a typical new mortgage is down almost $5,000 just since I took office, one year. And low interest rates will solve the Biden created housing problem, while at the same time protecting the values of those people who already own a house that really feel rich for the first time in their lives.”
By CEO NA Editorial Staff
