Refinance Rush as 30-year rate falls below 3%
With the 30-year mortgage rate falling this week below 3% for the first time in a half-century, more U.S. homeowners are likely to seize the chance to refinance their home loans.
Americans refinanced nearly 2 million home loans from January through April, more than double the same four-month stretch in 2019, according to real estate data company CoreLogic. And “cash-out” refinancing, when homeowners withdraw equity from their home's value, typically to pay down higher-interest debt or cover remodeling expenses, rose more than 70% from a year earlier.
Mortgage refinancings are outpacing home purchase loans this year, in part because the labor market fallout and economic uncertainty due to the coronavirus pandemic has put off some would-be buyers and sellers.
The average rate on the key 30-year fixed-rate mortgage fell this week to 2.98%, mortgage buyer Freddie Mac said Thursday. It's the first time in 50 years that the average rate on the 30-year loan has dropped below 3%. The rate averaged 3.81% a year ago.
Although not everyone is ready to buy at the moment, taking advantage of historically low interest rates may be helpful in these uncertain times. If you or someone you know is interested in refinancing, we can help!