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It took a long week for U.S. consumers to fully wake up to the lower rates that followed Britain’s vote to leave the European Union. But now that they have, they’re beating a path to mortgage lenders’ doors.
Mortgage applications surged 14% last week to their highest level in more than three years. Applications of almost every type rose dramatically against the backdrop of rates that are at their lowest point in over three years.
The weekly data from the Mortgage Bankers Association confirm that lower rates are indeed driving a huge increase in applications this summer compared with last summer. The index tracking all mortgage applications is up 64% on a year-over-year basis. Purchase applications are up 29% from last year, while refinance applications are up a whopping 94%.
Last week, the average 30-year conforming rate on applications was 3.66%—and that’s a figure we haven’t seen since May 2013. That weekly average is 9 basis points lower than it was the week before the Brexit vote on June 23, and it continues to trend down daily. (One basis point equals 0.01 percentage point.)
The average 30-year jumbo was 3.73%, which is probably the lowest it has ever been (MBA didn’t start tracking jumbo rates until 2011).