MBA: Refinance applications surge again -- and some mortgage rate history
This continues the recent trend of lower rates spurring a big increase in refinancing activity, but a much more modest rise in home buying. That makes sense when you think about it. Refinancing to lower your monthly payments and interest rate is a no-brainer if you're going to be in the house long enough to recoup the up-front cost of the transaction. But buying a house is a much different financial commitment -- one Americans aren't willing to make if they lack confidence that home prices will hold up and if they're afraid of losing their jobs.
Incidentally, Freddie Mac's 30-year rate average was 5.19% in the most recent week. That was the lowest the company has found since it started conducting its primary mortgage market survey in 1971. The book A History of Interest Rates by Sidney Homer and Richard Sylla has some mortgage rate data going back much farther than that. If you use the book's Manhattan/HUD annual average 30-year rate as your benchmark, you can't find a rate below 5.19% going all the way back to 1955 (5.18%). The lowest annual rate average this century? 4.7% in 1945.