As the year progresses, positive news has emerged in the real estate market, indicating that interest rates have reached their lowest levels in over a year. With interest rates declining, statistics show that homeowners are seizing the opportunity to refinance their home loans, leading to a rise in mortgage applications.

Mortgage applications have surged by 35% between August 4th and August 10th compared to the previous week, marking a 118% increase from the same week last year. Several factors contributed to this trend, including favorable decreases in the 15-year and 30-year fixed mortgage rates for homebuyers. Specifically, the 30-year fixed rate with conforming loan balances of $766,550 or less has decreased from 6.55% to 6.54%, with points dropping from 0.58% to 0.57% (including the origination fee) for 80% loan-to-value ratio (LTV) loans. This decrease in points and more favorable mortgage rates is great news for helping homebuyers lower their monthly payment and interest paid over time. 

Although the 0.01 point shift may seem slight, it represents a significant victory, signaling a positive trend for homebuyers. Additionally, the 15-year fixed-rate mortgage has decreased from 6.03% to 5.96%, with points decreasing to 0.65 from 0.74 (including the origination fee) for 80% loan-to-value (LTV) ratio loans. These points are significant in helping to reduce the homebuyer’s loan interest rate and can help them save more money in the long run. 

As a result of this news, the number of homebuyers submitting mortgage applications has increased noticeably, with a rise of approximately 3% from July 28th to August 10th. The overall percentage of mortgage activity also saw an uptick, climbing to 48.6% of total applications from 41.7% the previous week. 

Market statistics indicate that market conditions are gradually improving across different loan types, which showcases an excellent opportunity for homeowners to capitalize on these refinancing opportunities.

By BeachesMLS Staff
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Source: CNBC and Mortgage Bankers Association(MBA)