Weekly mortgage applications soar as rates head lower

• Refinance applications jump 26% in the past week
• Mortgage applications climb 15%

Refinance applications soared 26% last week compared with the week prior, according to the Mortgage Bankers Association. Total mortgage applications were up 15.1%. These figures are expected to rise after the Fed cut interest rates by 0.50 % and 10-Year U.S. Treasury yields fell below 1% for the first time yesterday.

This could be a huge opportunity for people looking to buy homes or refinance at lower rates and a boon to the housing market and homebuilder stocks. Google saw over 500,000 searches for “Mortgage Rates” in the U.S. yesterday.

The average 30 Year Mortgage Rate for the week ending Feb. 27 was 3.45%, according to FreddieMac. This figure is close to its all-time-low of 3.31% reported in Nov. 2012. The drop in rates has been a boon to homebuilder stocks in the U.S., which are among the rare stocks to rise during a week of heavy volatility and selling. The ITB ETF, which tracks U.S. homebuilders is slightly higher over the past five days compared to a 2.5% decline for the S&P500.

“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,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Given the further drop in Treasury rates this week, we expect refinance activity will increase even more until fears subside and rates stabilize.”