A brief, big dip in mortgage rates this week prompted homeowners and home buyers to seize the moment, sending mortgage applications to a six-month high.
Mortgage rates dropped to the lowest level in five months, due in part to financial markets feeling uncertain about the future of the U.S. economy in the face of widespread tariffs on imported goods.
The 30-year fixed-rate mortgage fell to 6.61% as of April 4, which spurred a jump in home-buying and refinancing activity, according to a weekly report by the Mortgage Bankers Association, an industry trade group.
Purchase activity, which refers to home buyers applying for mortgages to purchase a home, rose 9.2% from the week prior.
The data suggest that many home buyers have been waiting for lower rates. The housing market is in one of its busiest seasons, and a dip in rates came at the right time for those fed up with high prices and high interest rates. The median U.S. price of an existing home as of February was $398,400.
Refinance activity rose 35.3% from the previous week. “Refinance applications rose … to the highest level in six months, as borrowers with larger loan sizes tend to be more sensitive to rate changes,” Joel Kan, deputy chief economist and vice president at the MBA, said in a statement.
The average size of the loan being refinanced over the week was $399,600, he noted.
Mortgage rates across various types of home loans plunged across the board.
The average contract rate for a 30-year mortgage for homes sold for $806,500 or less was 6.61% for the week ending April 4. That was down 9 basis points from the previous week.
The rate for jumbo loans, or 30-year mortgages for homes sold for more than $806,500, was 6.65%, down 11 basis points from the previous week.
The average rate for a 30-year mortgage backed by the Federal Housing Administration was 6.33%, down 4 basis points from the week prior. Those loans are often used by first-time home buyers.
The average 15-year mortgage rate was down 11 basis points, to 5.93%.
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