The average U.S. mortgage rate for a 30-year fixed loan remained unchanged at 2.72% this week, Freddie Mac said in a report on Thursday – the second week in a row rates have sat at the lowest recorded level in the survey’s near 50-year history.
The average fixed rate for a 15-year mortgage also remained unchanged from last week at 2.28%.
After another week at the record low, there have now been 18 consecutive weeks when average mortgage rates have been below 3%. This also marks the second time in the survey’s history rates have fallen below 2.75%.
These consistently low rates are advantageous for borrowers – putting 19.4 million “high quality” candidates up for refinance savings eligibility, according to a recent report from Black Knight. With current rates, Black Knight estimates some homeowners could save up to $400 or $500 a month.
Last week alone, both the refinance index and the share of refinance applications were at their highest levels since April, as rates drew more conventional loan borrowers in to the market, Joel Kan, MBA’s associate vice president of industry and economic forecasting said.
Leveraging eClosings to Effectively Manage Increased Loan Volumes
With no end in sight to record low rates and the increased loan volume, lenders must streamline workflows and accelerate time to close. Evolving from traditional closings to hybrid closings to full eClosings can help lenders process more loans at a faster pace without overwhelming their resources.
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“Mortgage rates remain at record lows and while that has fueled a refinance boom, it’s been driven mainly by higher income borrowers. With about 20 million borrowers eligible to refinance, lower- and middle-income borrowers are leaving money on the table by not taking advantage of low rates,” said Sam Khater, Freddie Mac’s chief economist.
However, Khater noted the homebuying surge has created a seller’s market, where inventory is at a record low and home prices are rising, beginning to offset the benefits of the low rates.
With so many borrowers jumping at the chance of a record-low rate, home prices are responding to the demand. The S&P CoreLogic Case-Shiller index covering home prices of all nine U.S. census divisions rose 7% in September from a year ago, the greatest year-over-year gain since 2014.