According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell to their lowest level in more than three years last week. And, in the case of jumbo loans, rates fell to lows not seen since 2011.
Michael Fratantoni, MBA’s chief economist, told CNBC that financial market volatility is behind the rate drop. “Mortgage rates have been low for years, but the impact of Brexit has brought us close to record lows once again, with jumbo rates already at their lowest levels, giving more borrowers a larger incentive to refinance,” Fratantoni said in reference to Britain’s exit from the European Union. In fact, refinance activity – which is more sensitive to rate fluctuations – surged last week, climbing 21 percent from the week before. With rates down across all loan categories, including FHA loans and 15-year fixed-rate mortgages, that’s no surprise. Purchase activity also benefited from falling mortgage rates. The seasonally adjusted purchase index was up 4 percent and is now 23 percent higher than the same week one year ago. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.