Mortgage Refinance Applications Soar 79% Amid Record-Low Rates

A measure of U.S. home-refinancing applications soared to the highest level since April 2009, a sign that some American homeowners may see a silver lining in the coronavirus outbreak that’s battering the economy and markets.

The Mortgage Bankers Association’s refinance index surged 78.6% in the week ended March 6 to 6,418.9, according to a report Wednesday that also showed the contract rate on a 30-year fixed loan fell to match a record low 3.47%.

Cheaper borrowing costs reflect a drop in Treasury yields as investors rush to the safety of government debt amid stock market chaos caused by the virus. Yields on government bonds that underpin home lending have plunged to record lows this week as the entire U.S. yield curve fell below 1% for the first time.

Previously, MBA released updated forecasts on Tuesday that showed it expects mortgage originations will rise 20% this year to $2.61 trillion as refinancings jump 37% to $1.32 trillion, the most since 2012.

Lowering payments could help put more cash in the pockets of consumers, whose spending makes up the biggest share of the world’s largest economy, and help offset at least some of economic hit from the virus and stocks rout. Falling rates could also help residential investment, which supported growth in the second half of last year after acting as a drag for the prior six quarters.