Homeowners race to refinance as mortgage rates retreat from 23-year highs
A recent pullback in mortgage rates is spurring more homeowners to refinance their home loan and lower their monthly payments
LOS ANGELES — A recent pullback in mortgage rates is spurring more homeowners to refinance their home loan and lower their monthly payments.
The Mortgage Bankers Association's refinance index, which tracks home loan application volume, surged 16% last week from the previous week to its highest level in two years, the association said Wednesday.
Refinance applications were up nearly 60% versus the same week last year.
Home loan applications rose overall last week to their highest level since January, though much of that was due to the surge in refinance applications.
Despite the lower borrowing costs, applications for loans to buy a home rose only 0.8% from the previous week and were down about 11% from a year earlier, the MBA said.
For many home shoppers, mortgage rates remain too high, given record-high housing prices and a chronic shortage of properties on the market.
“For-sale inventory is beginning to increase gradually in some parts of the country and homebuyers might be biding their time to enter the market given the prospect of lower rates,” said Joel Kan, the MBA’s deputy chief economist.
The average rate on a 30-year mortgage was 6.73% last week, its lowest level since early February, according to mortgage buyer Freddie Mac. The average rate declined again this week, falling to 6.47%, the lowest level in more than a year.
After jumping to a 23-year high of 7.79% in October, the average rate has mostly hovered around 7% this year — more than double what it was just three years ago.
The elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have
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