U.S. mortgage rates fall to their lowest since February, applications rise

U.S. mortgage rates fell to their lowest level since February, sending homeowners to lenders and borrowers to the bank, to refinance and save money on their monthly payments.

The Mortgage Bankers Association (MBA) reported that the rate for 30-year fixed-rate mortgages declined to 3.01%, and for 15-year mortgages, it's 2.36%, in its weekly assessment. Last week, the typical interest rate for 30-year fixed-rate mortgages was reported as 3.11%. 

Applications to refinance a home loan jumped 9% last week from the previous week but were still 10% lower than a year ago. The refinance share of mortgage activity increased to 67.2% of total applications from 64.9% the previous week.

MBA’s associate vice president of economist and industry forecasting, Joel Kan, said, “The 10-year Treasury yield fell last week, as investors grew concerned about increasing COVID-19 case counts and the downside risks to the current economic recovery.

Meanwhile, applications for a mortgage to purchase a home fell 2% for the week and were 18% lower than a year ago. That was the second week of declines and the lowest level since May 2020. Purchase applications have remained low, annually, for the past three months.

The mortgage rates are loosely connected to the 10-year U.S. Treasury yields and are controlled by the demand for mortgage-backed bonds, which are bought by the Fed. The mortgage rates could fall lower if the Fed suggests buying will continue longer than expected.

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