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    Mortgage Rates Hit Record Low, Refinancing Sky Rockets

    The first week of March saw a surprise move by the Federal Reserve as the United States braces for potential economic effects from the global spread of the coronavirus. Mortgage rates nationwide fell to the lowest levels recorded since 1971, according to the most recent survey from Freddie Mac. Mortgage rates for a 30-year fixed-rate dropped to 3.29 percent, down from 3.45 percent a week earlier and 4.41 percent a year ago. 15-year fixed-rates also dropped to 2.79 percent, down from 2.95 percent a week ago and 3.83 percent this time last year.

    The last time the Federal Reserve announced an emergency cut to the benchmark rate was during the 2008 financial crisis. According to Danielle Hale, one of Realtor.com’s chief economists, “The surprise rate cut, the largest since December 2008, is a strong move by the Fed to shore up economic activity even though most economic data has not yet shown major slowing. Lower mortgage rates are likely to drive refinances higher and may entice home buyers out to shop as well. That’s certainly the Fed’s hope.”

    So far, existing homeowners applying for refinancing account for 66.2 percent of mortgage applications, according to the newest data released from the Mortgage Bankers Association. Bob Broeksmit, president and CEO of the Mortgage Bankers Association, explains, “The lowest mortgage rates in more than seven years led to a 26 percent spike in refinances last week, and the annual increase, at 224 percent, was even more impressive.”

    With the rush of homeowners and first-time buyers looking to take advantage of record low rates, mortgage lenders and banks are hiring more staff and moving current employees into the mortgage business to handle the increased volume in applications.

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