U.S. Mortgage Refinancing Hits Post-2020 Peak

Mortgage
Photo by Tierra Mallorca on Unsplash

The Mortgage Bankers Association’s (MBA) refinancing index rose 34.5% to 889.3, the highest level since the height of the pandemic in 2020. For the week ended August 9, mortgage applications for purchasing a home rose by 2.8%, the highest level since the first week of June.

MBA reported that its 30-year fixed mortgage contract rate retreated by 1 basis point to 6.54%, while the contract rate on the 15-year mortgage contract plunged by 7 basis points to 5.96%, the lowest since May 2023. The 15-year fixed mortgage is currently 8 basis points below the five-year adjustable mortgage rate, the widest margin since January 2022.

Although mortgage rates have held below 7%, house purchases remain stunted as prices continue to rise. The National Association of Realtors reported that prices rose by 4.9% in the second quarter compared to the same quarter in 2023. Currently, a household income of at least $100,000 is required to be able to afford a mortgage with a 10% down payment in 48% of real estate markets nationwide, the National Association of Realtors explained. Given that this was only the case in 40.7% of US home markets during the first quarter, the affordability of homes in the US is on a rapid decline.

Brian D
Brian loves music and tries to go to a music festival every summer. When he's not listening to music, he writes about movies, food, art, and anything newsy.