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Points for the week of April 4 were 0.5 percent. During the same period last year, the 30-year rate was 4.4 percent.
Lower mortgage rates have led to a spike in overall mortgage demand – which is at its highest level since 2016, according to the government-sponsored housing agency, ahead of a potentially busy spring season.
One good sign? Weekly mortgage refinance activity jumped nearly 40 percent for the week ending March 29, according to the Mortgage Bankers Association, the highest level in more than three years.
There was also a spike in purchase mortgage application demand – signaling desire among individuals to buy homes.
In fact, according to the Mortgage Bankers Association, there were more applications for smaller purchase loan sizes – a positive sign that first-time buyers are looking to enter the market. The MBA expects a further decline in rates, in combination with strength in the labor market, to boost purchase activity this year.
Lawrence Yun, chief economist at the National Association of Realtors, told FOX Business he expects to see “very solid” activity this spring buying season – thanks in part to those lower rates and more moderate price increases.
Robert Dietz, chief economist for the National Association of Homebuilders, told FOX Business that the decline in rates can partly be attributed to the Federal Reserve’s decision to pause interest rate hikes in 2019. Dietz, however, cautioned that first-time buyers will likely continue facing affordability challenges as inventory remains constrained, despite a reprieve on the interest rate side of the equation.
As previously reported by FOX Business, because of pent up demand and decreased competition, the first week in April is considered the best week for sellers to list their homes.