Home borrowing has taken off again, with mortgage applications hitting their highest level in over a month, according to an industry group. And that's not all: The number of refinance applications is nearly triple what it was last year at this time.
Homeowners and homebuyers may have gotten spooked by recent increases in mortgage rates, though rates are still ridiculously low compared to a year ago.
Some owners have found they can save money by refinancing home loans they took out just last year.
Mortgage applications jump, led by refis
Mortgage applications overall rose 9.6% last week, compared to the previous week, the Mortgage Bankers Association reported Wednesday.
Refinance applications were up a strong 13% from a week earlier, and were a staggering 188% higher than the number of those loans that lenders received during the first week of November 2018.
Refinancings accounted for 61.9% of all mortgage applications last week, versus 59.5% a week earlier.
The amount of mortgage purchase applications — for loans to buy homes — climbed 5% last week and were up 15% from the same week one year ago.
Use this calculator to see how a refinance could cut your monthly mortgage payment.
The impact from mortgage rates
Homeowners have been moving to refinance despite recent increases in mortgage rates, says Joel Kan, associate vice president of forecasting for the Mortgage Bankers Association.
"With rates still in the 4% range, we continue to expect to see moderate growth in refinance activity in the final weeks of 2019," Kan says.
Homebuyers are keeping lenders busy, too.
"Low supply and high home prices remain a key characteristic of this fall's housing market, which is why the largest growth in activity continues to be in loans with higher loan balances," says Kan.
According to the closely followed survey from mortgage giant Freddie Mac, mortgage rates finally backtracked last week — after moving higher for three weeks in a row.
The average for a 30-year fixed-rate mortgage fell to 3.69%, from 3.78% the previous week. Rates on 15-year fixed-rate mortgages, which are a popular refinancing option, dipped to an average 3.13%, from 3.19%.
The outlook for mortgages
Freddie Mac will release fresh mortgage rates data on Thursday.
The benchmark 30-year mortgage rate is likely to remain low — at an average 3.7% — through the end of the year, according to Freddie Mac's latest forecast. Just slightly higher rates — averaging 3.8% — are predicted for 2020.
Though rates have been trending upward, they're still down considerably from last year.
On average, you can get a 30-year mortgage more than one full percentage point below the rates offered in November 2018, and Freddie Mac has said refinancers this year have been saving about $1,700 a year in interest costs.
Check out today's best mortgage rates where you live.