Refinancing of mortgage loans at a three-year high, driven by low interest rates

NEW YORK – Lenders are inundated with applications to refinance mortgages at a pace not seen since 2016, as US homeowners rush to take advantage of the recent fall in prices.

The Mortgage Bankers Association, a trade group, said the amount of mortgage refinancing applications rose 0.4 percent last week from the week before, reaching its highest level since July 2016. That was the fourth straight increase.

The advance came as rates for 30-year mortgage backed by Fannie Mae or Freddie Mac fell to 3.9 percent, the lowest since November 2016, according to the MBA. Amid mounting fears of a possible slowdown in global economic growth, borrowing costs are largely falling.

"A whole lot of people who bought homes over the last three years check very closely to see if they want to save money by refinancing," said Jeff Tucker, an economist at the Zillow Group real estate data firm.

As of August 8, around 1[ads1]0 million homeowners could reduce their mortgage rates by at least 0.75 percentage points by refinancing, saving an average of about $ 267 a month, according to the analysis firm Black Knight. It's far from last year when interest rates climbed and banks cut mortgage workers. In 2018, MBA's applications for refinancing index tracking fell to the lowest level in almost two decades.

Mortgage loan applications fell by 4 percent last week, which helped reduce the overall mortgage loan application volume by 0.9 percent, according to the MBA. Total volume has risen around 70 percent since the end of last year.