It’s been tough to find any good news with an awareness of the coronavirus being more heightened. But homeowners and would-be-homeowners might feel differently.
Refinancing rates for 30-year mortgages recently fell to 3.57 percent, while mortgage rates for new loans stood at 3.11 percent on Monday. Consumers are taking note at the low rates and flocking to lenders in droves. Origination fees and points fell from 0.27 to 0.26 on loans that have a 20 percent down payment.
According to the Mortgage Bankers Association (MBA), there’s been a 26 percent increase in mortgage refinance applications alone. In fact, many lenders have stopped accepting mortgage applications because they can’t keep up with the rapid influx of applications.
Matthew Graham, COO of Mortgage News Daily, said: “Demand has ramped up in a way that many lenders have never experienced. Some of them have taken to raising rates in order to deter new business. Others have completely stopped accepting new applications.”
But Mike Fratantoni of MBA expects that mortgage activity will continue to rise. “Given the further drop in Treasury rates, we expect refinance activity will increase even more until fears subside and rates stabilize.”
Fratantoni also noted: “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.”
Some lenders are hiring extra staff to deal with increased demand. Wells Fargo said it’s hiring processors, underwriters, and closers to help its fulfillment group with the increased application volume. Wells Fargo spokesman Tom Goyda said, “We’re also executing on opportunities to shift team members from other non-fulfillment groups into our fulfillment operation.”
In all, total mortgage applications were up by 15.1 percent the past week. Refinance applications are up by 26 percent.