Mortgage applications surged last month as home buyers rushed to take advantage of low interest rates spurred by the economic uncertainty surrounding the coronavirus pandemic.
Applications jumped 25.9% as compared to February 2019, according to the latest survey from the Mortgage Bankers Association. Sales of new homes rose an estimated 8%, the group said.
But the coronavirus, which has led anxious investors to shift from stocks to bonds, causing interest rates to fall, remains a wild card that could potentially chill the spring homebuying season.
“Looking ahead, there is significant uncertainty regarding how the coronavirus epidemic will impact the housing market,” Joel Kan, the MBA’s associate vice president of economic and industry forecasting said in a statement announcing the survey’s results.
Interest rates for a 30-year fixed-rate mortgage hit a record low near the start of this month, averaging 3.29%, according to Freddie Mac. But last week, rates inched up to 3.36% as overwhelmed lenders made borrowing a bit more expensive to slow the deluge of people trying to refinance and shave their monthly payments.
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“As refinance applications continue to surge and lenders work to manage capacity, the 30-year fixed-rate mortgage ticked up from last week’s all-time low,” Sam Khater, Freddie Mac’s chief economist said in a statement last week. “Mortgage rates remain at extraordinary levels and many homeowners are smartly weighing their options to refinance, potentially saving themselves money.”
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