Homeowners saw an opportunity last week and seized it. A sudden and unexpected drop in mortgage rates sent borrowers to their lenders in droves, hoping to save on their monthly payments.
Applications to refinance a home loan jumped 20% last week from the previous week, according to the Mortgage Bankers Association’s weekly index, which was seasonally adjusted, including for the Fourth of July holiday.
Refinance demand is highly sensitive to weekly and even daily rate moves. While the drop wasn’t exactly huge, it was enough, given that rates were expected to start moving higher with the stronger economy.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.09% from 3.15%, with points decreasing to 0.37 from 0.38 (including the origination fee) for loans with a 20% down payment.
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