The average rate of a 30-year fixed-rate mortgage fell to a historic low of 3.29%, according to Freddie Mac’s Primary Mortgage Market Survey.
This is the lowest rate in the survey’s almost 50-year history.
“Meanwhile, mortgage applications increased 10 percent last week from one year ago and show no signs of slowing down,” said Sam Khater, Freddie Mac’s Chief Economist. “Given these strong indicators in rates and sales, as well as recent increases in new construction, it’s clear the housing market continues to be a positive force for the broader economy.”
Freddie Mac’s latest reading a large drop from the prior week’s 3.45% and last year’s 4.41%.
Rates for a 15-year fixed-rate mortgage averaged 2.79%, which is down from 2.95% from the previous week. Last year the rate for a 15-year fixed-rate mortgage was 3.83%.
The Mortgage Business Association (MBA) reported mortgage applications rose 15.1% for the week ending on February 28 from the prior week.
According to the report, the refinance index increased 26% from the previous week and was 224% higher than the same week in 2019. The purchase index, though, dropped 3% from the prior week.
"The 30-year fixed-rate mortgage dropped to its lowest level in more than seven years last week, amidst increasing concerns regarding the economic impact from the spread of the coronavirus, as well as the tremendous financial market volatility. Refinance demand jumped as a result, with conventional refinance applications increasing more than 30 percent," said Mike Fratantoni, MBA's SVP and Chief Economist. "Given the further drop in Treasury rates this week, we expect refinance activity will increase even more until fears subside and rates stabilize."
Fratantoni added that while the purchase index fell from the prior week, they are up 10% from the year prior.
“The next few weeks are key in whether these low mortgage rates bring in more buyers, or if economic uncertainty causes some home shoppers to temporarily delay their search,” he said.
Refinances now represent 66.2% of the mortgage activity for the week—an increase from 60.8% from the prior week.