The average 30-year fixed-rate mortgage was unchanged from the previous week, holding steady at 3.13%, according to Freddie Mac’s Primary Mortgage Market Survey [1].
“After the Great Recession, it took more than ten years for purchase demand to rebound to pre-recession levels, but in this crisis, it took less than ten weeks,” said Sam Khater, Freddie Mac’s Chief Economist. “The rebound in purchase demand partly reflects deferred sales as well as continued interest from prospective buyers looking to take advantage of the low mortgage rate environment.”
Freddie Mac stated that the average 15-year fixed-rate mortgage rose slightly—by 0.8 points—to 2.59%.
Despite mortgage rates hovering near-record lows, the Mortgage Bankers Association (MBA) [2] reported mortgage applications fell 8.7% for the week ending on June 19.
The MBA’s refinance index fell 12% week-over-week and purchases fell 3%.
"Refinance applications dropped to their lowest level in three weeks, but the index remained 76 percent higher than a year ago. Despite the decline last week, MBA still anticipates refinance originations to increase to $1.35 trillion in 2020—the highest level since 2012,” said Joel Kan, MBA's AVP of Economic and Industry Forecasting.
Kan continued with saying, "Even with high unemployment and economic uncertainty, the purchase market is strong. The activity has climbed above year-ago levels for five straight weeks and was 18% higher than a year ago last week. One factor that may potentially crimp growth in the months ahead is that the release of pent-up demand from earlier this spring is clashing with the tight supply of new and existing homes on the market. Additional housing inventory is needed to give buyers more options and to keep home prices from rising too fast."
The refinance share of mortgage activity decreased to 61.3% of the total applications from 63.2% the previous week.
Additionally, the MBA said the average interest rate for a 30-year fixed-rate mortgage was unchanged at 3.30%.