The average 30-year fixed-rate mortgage came in at 3.23% on Thursday and is the lowest rate in the 49-year history of Freddie Mac’s Primary Mortgage Market Survey. [1]
“The size and depth of the secondary mortgage market is helping to keep rates at record lows. These low rates are driving higher refinance activity and have modestly helped improve purchase demand from their extremely low levels in mid-April,” said Sam Khater, Freddie Mac’s Chief Economist. “While many people are benefiting from low mortgage rates, it’s important to remember that not all people are able to take advantage of them given the current pandemic.”
This is a decline from the prior week’s 3.33% and last year’s 4.14%. The average rate for a 15-year fixed-rate mortgage was 2.77%—lower than the prior week’s 2.86% and last years’ 3.60%.
Record-low mortgage rates, however, did not influence enough buyers to enter the market, as mortgage applications fell 3.3% from the prior week, according to the Mortgage Bankers Association (MBA). [2]
Refinances fell 7% from the prior week but are still 218% higher than the same week a year ago. The purchase index, however, rose 12% from the prior week but was 20% lower on a year-over-year basis.
“The ten largest states had increases in purchase activity, which is potentially a sign of the start of an upturn in the pandemic-delayed spring homebuying season, as coronavirus lockdown restrictions slowly ease in various markets," said Joel Kan, MBA's AVP of Economic and Industry Forecasting. "California and Washington continued to show increases in purchase activity, with New York seeing a significant gain after declines in five of the last six weeks."
The refinance share of mortgage activity decreased to 71.6% of total applications from 75.4% the previous week.
The MBA also reported that the number of loans in forbearance [3]rose to 6.99% from the prior weeks’ 5.95%.
Mortgages backed by Ginnie Mae had the largest growth in forbearance at 1.47% and the largest overall share of loans in forbearance at 9.73%.