Mortgage rates in the US fell by the most in a year, fueling a surge in refinancing demand from homeowners looking to save money.
The average for 30-year, fixed loans was 6.35%, down from 6.5% last week, Freddie Mac said in a statement.
Borrowing costs have been trending lower for months, and took another leg down after a disappointing jobs report Friday increased the likelihood of more rate cuts from the Federal Reserve.
By Monday, consumers were able to lock in 30-year rates at 6.27%, the lowest in almost a year, according to data from Texas-based Optimal Blue, a mortgage technology provider. The next day, as rates ticked up, the volume of rate locks surged to the highest level for any single day since 2022, the company said.
“This may indicate homebuyer eagerness to lock in rates before further rate climbs,” said Mike Vough, the company’s head of corporate strategy.
When the 30-year rate was at 6.5%, about 2.5 million US borrowers were “in the money” to refinance, meaning they could lower their rate by at least 75 basis points, according to data tracker ICE Mortgage Technology. If average borrowing costs drop to 6.125%, five million mortgages would be candidates for a refinance.
