Here Are Today's Best Mortgage & Refinance Rates for September 11, 2020
Borrowers with 700 credit scores were quoted an average rate of 3.556% to secure a 30-year fixed-rate purchase mortgage on Thursday, according to Money's survey of over 8,000 lenders across the United States. At this credit score, roughly the national average, the average rate for a 30-year refinance was 4.428%. Our rates include discount points and are for borrowers putting 20% down.
| 30-year fixed-rate purchase mortgage |
| 3.556% |
| Rate of September 10, 2020 |
Borrowers in Illinois were quoted the lowest mortgage rates on Thursday—at 3.332%. Those in New Mexico saw the highest average rate at 3.784%. Nationwide, borrowers with the highest credit scores, 740 and above, were quoted rates averaging 3.141%, while those with credit of 640 or below were given rates of 4.888%—a 1.747 percentage point spread.
You may be able to negotiate a lower rate if you shop around or if you have other accounts with the lender. (Money's picks for the best mortgage lenders are here). Currently, some banks are hiking up advertised rates to keep demand in check, so you may be offered a lower rate if you reach out directly.
Freddie Mac's widely quoted Primary Mortgage Market Survey put rates at 2.86%, a new record low, with 0.8 points paid for the week ending September 10. The mortgage purchaser's weekly survey reflects borrowers who put 20% down on conforming loans and have excellent credit.
Refinance rates today
Money's survey shows that the offered rate for a 30 year refinance for someone with a 740 credit score was 3.678% on Thursday. Last September, the average mortgage rate (including fees) was 3.922%.
| 30-year fixed-rate mortgage refi |
| 3.678% |
| Rate of September 10, 2020 |
A homeowner with a $200,000 mortgage balance currently paying 3.922% on a 30-year loan could potentially cut their monthly payment from $946 to $918 by financing at today's lower rates. To determine if it's worth it to refinance your mortgage, also consider the closing fees you paid on your current mortgage, how much your new lender is charging and how long you have left on your loan term. (Our picks for the best lenders for refinancing are here).
What else is happening in the housing market right now?
Earlier this week Fannie Mae released its Home Purchase Sentiment Index which indicated that consumers have a more positive outlook for the housing market, with the August index increasing 3.3 points from July to 77.5. The index tracks consumer's outlook on home-buying and selling conditions, mortgage rates, job stability and the potential for a change in household income. Fannie Mae started the index in June 2010.
"The HPSI rose modestly in August, recovering the ground it lost in July," said Doug Duncan, chief economist for Fannie Mae. "The HPSI's recovery was driven by near-record low mortgage rates that helped restore much of consumers' positivity on whether it is a good time to buy a home, while also improving the good-time-to-sell sentiment. The August survey was conducted as consumers continue to face uncertainty regarding schools' and businesses' reopening plans and as the CARES Act $600 per week income supplement expired."
The number of consumers who believe now is a good time to buy a home increased from 53% in July to 59% in August, while those who say it is a bad time to buy declined from 38% to 35%. Likewise, those who believed now was a good time to sell a house increased from 45% to 48%, while those who believe it is a bad time to sell decreased from 48% to 45%.
Slightly more people believe mortgage rates will go down over the next 12 months, increasing from 16% to 17% of respondents while fewer expect them to go up (from 35% to 33%). The largest share of consumers (45%) believe rates will stay the same. Fewer people are expecting home prices to continue to rise as well, with the largest group (34%) believing prices will remain the same.
As for job expectations and income, 78% of consumers believe they are not in danger of losing their job during the next 12 months, up 2 percentage points from July, while those who are concerned decreased from 23% to 22%. Those who reported their household income was significantly higher than it was last year increased from 22% to 25%, while those who reported their income as less than las year remained unchanged at 16%.
The Week in Review
This week in housing and economic news
The week ended with more good news than bad for homeowners as the housing market continued to show resiliency amidst the ongoing COVID-19 pandemic.
The best news came on Thursday when Freddie Mac released its Primary Mortgage Market Survey showing the average interest rate for a 30-year mortgage loan set a new all-time low of 2.86%, beating the previous record by 0.02 percentage points. The new low in rates came as a result of an apparent slowdown in the country's economic rebound from COVID-19.
The overall number of mortgage loan applications was up 2.9% week-over-week, according to the Mortgage Bankers Association, with both purchase and refinance loans each increasing from the previous week. With the typical home buying season has been pushed to a later part of the year because of the earlier pandemic related lockdowns, purchase applications were up 40% year-over-year. Meanwhile, refinance applications were up 60%.
In fact, the housing market has been so busy that the second quarter of 2020 saw the highest number of mortgage loan origination volume on record, reaching a total of $1.1 trillion in first lien originations, according to real estate data provider Black Knight. Refinance activity was 60% higher than the first quarter of 2020 and double the volume from the second quarter of 2019. The data provider estimates that there are still 18 million homeowners who can take advantage of historically low interest rates to refinance and save money on their mortgage payments.
Meanwhile, the number of homeowners taking advantage of forbearance decreased slightly, down 4 basis points to 7.16% of all loans, according to the MBA. Despite the drop, the rate of exits from the program has slowed, and there are still an estimated 3.6 million homeowners in the payment deferral plans.
Homes were selling at a faster pace than ever before, according to Realtor.com. Homes were selling 12 days faster than the same time last year. The increased competition for affordable homes also helped push median home prices up 10.8% year-over-year as it continues to be a seller's market. However, Realtor.com's data also indicated a slowdown in home buyer demand—a possible indication that the housing market may be ready to start cooling down. The biggest obstacle to a continued resurgence is the lack of inventory—currently 39% lower than last year.
On the not so positive side, the number of mortgage loans that were in some stage of delinquency reached 7.1% in June, according to CoreLogic. The number of loans considered "seriously delinquent" (90 days or more past due) reached 3.4%, up from 1.3% in June 2019, and the highest percentage since 2015. Another 1.8% of loans that were 60 to 89 days past due, up from 0.6% last year. The good news is that the number of loans that were 30 days past due went down from 2.1% in 2019 to 1.8%, indicating there might be a slowdown in the number of loans going into delinquency as the economy tries to recover. Foreclosures were down to 0.3% from 0.4%, mostly due to the forbearance programs enacted when the pandemic began.
Finally, on the employment front, the number of initial jobless claims came in at 884,000, just 3,000 more than last week, but higher than the 850,000 economists had been expecting. It marks the second week in a row that the number of initial unemployment claims has been below the 1 million mark.