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Mortgage rates hit new record low

by Karen Faulkner, Worthy News Correspondent

(Worthy News) – Mortgage rates dropped to a new record low last week as the average interest rate for a 30-year fixed-rate mortgage, with a conforming loan balance of up to $510,400, fell from 3.26% to 3.19% to, CNBC reported Wednesday. Points fell from 0.35 to 0.33 for loans with a 20% down payment: 63 basis points lower than the recent high in late March.

The lower rates have encouraged mortgage demand: according to the Mortgage Bankers Association’s seasonally adjusted index, the number of mortgage applications rose by 5.1% last week compared with the week before, CNBC noted.

“Purchase activity remains relatively strong, despite the continued economic uncertainty and high unemployment caused by the ongoing pandemic,” Joel Kan, MBA Associate Vice President of Economic Forecasting, told CNBC.

Refinancing home loan application rose by 12% last week; 107% higher than a year ago. According to CNBC, “The refinance share of mortgage activity increased to 64.2% of total applications from 60.1% the previous week.”

Commenting on the outlook for housing for the remainder of 2020, Doug Duncan, chief economist at the Federal National Mortgage Association, told CNBC, “The continued decline in mortgage rates pushed up our refinance volume forecast by about $100 billion. At the current mortgage rate, we estimate that nearly 60% of all outstanding loan balances have at least a half-percentage point incentive to refinance.”