Weekly mortgage refinances spiked 26% as interest rates plunged amid coronavirus fears.
That drop caused a 26% surge in weekly refinance applications, the Mortgage Bankers Association said. Compared with one year ago, refinance volume was nearly 224% higher.
Mortgage applications increased 15.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
"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 Senior Vice President 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."
Added Fratantoni, "We are now at the start of the spring homebuying season. While purchase applications were down a bit for the week, they are still up about 10 percent from a year ago. 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."
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.57 percent from 3.73 percent.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.03 percent from 3.18 percent.