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Plunging U.S. interest rates are spurring a boom in mortgage applications, as many homeowners rush to refinance their home loans at cheaper rates.

Good times are here again -- for U.S. homeowners with high-cost mortgages. 

As financial markets flash warning signs of a recession and corporations agonize over the potential fallout from President Donald Trump's trade war, a recent plunge in U.S. interest rates is spurring many households to refinance their home loans -- at the lowest borrowing costs in almost three years.  

Applications for mortgages surged 22% last week on a seasonally adjusted basis, as refinancing applications surged to their highest in three years, the Mortgage Bankers Association said Wednesday in a press release. The volume of refinancing applications was triple the level of the same week of 2018.

Joel Kan, the association's associate vice president for economic and industry forecasting, said mortgage rates have fallen by 0.15 percentage point in the last two weeks alone. 

"The 2019 refinance wave continued, as homeowners last week responded to extraordinarily low mortgage rates," Kan said. 

A refinancing boom could help to support the economy by leaving households with extra cash to spend each month.

But the development also highlights a key risk for big lenders like JPMorgan Chase (JPM - Get Report) , Bank of America (BAC - Get Report) and Wells Fargo (WFC - Get Report) as interest rates fall: They'll book extra fees in the near term from processing loan applications, but longer-term they're likely to see lending margins shrink as portfolios of higher-paying mortgages are retired in favor of lower-yielding loans.   

The average contract interest rate for a conventional 30-year fixed-rate mortgage fell to 3.93% last week, the lowest since November 2016, according to the Mortgage Bankers Association. That's down from 4.01% the prior week.  

Mortgage applications for refinancings climbed by 37% vs. a 1.9% increase for home-purchase loans, the group said. 

As a result, the share of total applications intended for mortgage refinancings climbed to 61% from 54% the prior week. 

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