Mortgage rates fell to their lowest level on record today, pulled down by fears that the spread of coronavirus could weigh on the U.S. economy.
The average rate on a 30-year fixed-rate mortgage fell to 3.29% from 3.45% last week. Mortgage rates are closely linked to yields on the 10-year Treasury, which this week dropped below 1% for the first time following an emergency Federal Reserve rate cut.
A decline in mortgage rates typically boosts home sales, but worsening coronavirus epidemic and the efforts to contain it could keep would-be home buyers on the sidelines during what is usually a busy spring selling season.
The decline in rates is likely to continue to fuel a refinancing frenzy that pushed mortgage lending to its highest level since 2006 last year. About 14.5 million homeowners would benefit from refinancing if 30-year rates hit 3.25%, just below their current level, according to mortgage-data firm Black Knight Inc.
Refinancing applications were up 26% from the previous week and more than 200% from the same time last year, according to Mortgage Bankers Association data released Wednesday.
The jump in refinancings poses a challenge for banks and other mortgage lenders, which often hire staff when the housing market picks up each spring.
Thinking about refinancing or have questions on how this rate cut could benefit you? Contact us for help!
SOURCE: Wall Street Journal