Mortgage interest rates are down, and, not surprisingly, new mortgage applications were up last week, with industry insiders pointing to last month's "Brexit" vote as a driving factor.
According to the Mortgage Bankers Association, 30-year fixed mortgage rates for standard FHA home loans fell to 3.53% last week. That's down from 4.0% at the beginning of the year, and from 4.04% in July, 2015.
Lower home mortgage rates have triggered a big uptick in new mortgage applications, as the MBA reported a 7.2% increase in new mortgage activity, for the week ending July 8, 2016. That's officially a trend, as economists like to say, as mortgage applications had risen by 14% for the week ending July 1, 2016 (the Brexit vote took place on June 23, 2016).
Most of the new mortgage activity is focused on refinancing, as homeowners seek to jump on those lower rates. Home mortgage refinancing was up 21% in the week after the Brexit vote, and at 61% of all new mortgages, refinancing deals are at a five-month high, the MBA reports.
"Interest rates continued to drop last week as markets assessed the impact of Brexit, downgrading the likelihood of additional rate hikes by the Fed, and mortgage rates for 30-year conforming loans dropped to their lowest level in over three years," says Mike Fratantoni, chief economist at the Washington, D.C.-based MBA. "In response, refinance application volume jumped almost 21% in the week after the Brexit vote to its highest level since January 2015."