Refinances have doubled in the last week as mortgage rates hit a nearly three-year low.
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Mortgage rates hit an almost three-year low last week, and it seems homeowners are finally taking full advantage.
According to new data from the Mortgage Bankers Association, refinances have doubled since late July and are up 37% in just the last week. They’re now at their highest point since mid-2016.
Freddie Mac shows the average rate on a 30-year, fixed mortgage is just 3.6%—a 15-point decrease from one week prior.
Trade wars and economic uncertainty are the most likely culprits, sending Treasury yields and interest rates down with them, explains Joel Kan, associated vice president of economic and industry forecasting for the Mortgage Bankers Association.
“The 2019 refinance wave continued, as homeowners last week responded to extraordinarily low mortgage rates,” Kan said. “Fears of an escalating trade war, combined with economic and geopolitical concerns, once again pulled U.S. Treasury rates lower.”
As of Friday, analysis from property data firm Black Knight shows there are about 20 million homeowners who could “theoretically” see a 75-point drop in mortgage rates by refinancing. If they have at credit score of 720 and at least 20% equity in their property, it could mean savings of nearly $270 per month.
Rates are expected to edge up slightly this week, but not by much.
As Holden Lewis, home expert for NerdWallet explains, “Mortgage rates have rebounded a bit in the last week, but even so, millions of homeowners could save money by refinancing. That includes most people who bought homes in 2018. Seriously, even if you bought your home last year, you could save money by refinancing right now.”
Freddie Mac, Fannie Mae and the Mortgage Bankers Association all predict a sub-4% rate for the remainder of the year.