Weekly Mortgage Refinances Surge 26% As Rates Tank

Just think about this. Sure, coronavirus may wind up ravaging our country and affecting many of our loved ones. Perhaps you will even die from it. But the silver lining is that you will die knowing you shaved 50 basis points worth of interest off of your mortgage payments. 

Now that’s a way to go out!

Americans are rushing to their lenders as rates plunge over the last several weeks, causing refinance volumes to spike and total mortgage application volume to go with it. While refinances were up 26%, mortgage application volume was up 15.1%. 

The average contract interest rate for 30-year fixed-rate mortgages with balances of $510,400 or less decreased to 3.57% from 3.73%, with points decreasing to 0.26 from 0.27 for loans with a 20% down payment, according to CNBC.

Now, rates have fallen even more, prompting the surge in refinances, which are up 224% from last year. Last year, the average rate was at 4.67%.

Mike Fratantoni, MBA’s senior vice president and chief economist said:

 “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. Given the further drop in Treasury rates this week, we expect refinance activity will increase even more until fears subside and rates stabilize.”

Quicken Loans said they saw “record setting” volume on Monday and Tuesday as rates fell. CEO Jay Farner said:

 “The way that we leverage technology to communicate with our clients, to make it easy for them to make a mortgage application, for our underwriters, we can scale very quickly, which helps us when we see increased volume like this.”

He continued:

“As application volumes increase, our turn times are remaining steady. We can scale with our clients and still can expect to make application and close a mortgage within a few weeks and not have to wait months and months as volumes increase.”

Isn’t it great? Prosperity for everyone! And if you get a good enough deal on your mortgage, scientists say you’re no longer at risk of the biological pathogen that’s sweeping the nation. Maybe next, to spur additional homebuying and growth, the Fed can revert back to the no-doc NINJA loans of the 2000’s.

Those really helped the market take off!