The average mortgage rate for a 30-year fixed loan remained unchanged last week from the week prior at 2.73%, according to Freddie Mac’s Primary Mortgage Market Survey.
With mortgage rates hovering below 3% for over six months now, Sam Khater, Freddie Mac’s chief economist, said this may be a sign of an economy still struggling.
“This rate environment is advantageous for those who are looking to refinance in order to strengthen their financial position,” Khater said. “While many have already refinanced, the evidence suggests that upper-income homeowners have taken advantage of the opportunity more so than lower-income homeowners who could stand to benefit the most by lowering their monthly mortgage payment.”
Overall, record low mortgage rates are still fanning the refi flame regardless of who’s snagging the offer. The Mortgage Bankers Association reported that the refinance index of mortgage applications hit its highest level since March 2020 last week – a whopping 59% higher year-over-year.
And while borrowers are scrambling to snag what’s left of record low inventory, LOs came out on top. Recent data from mortgage software firm LBA Ware revealed that total funded loan volume by LOs in Q4 2020 increased 106% from the fourth quarter of 2019.
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The average LO managed to produce $2.6 million per month in volume in the last quarter, thanks to all those sweet low mortgage rates. That’s a 63% increase and a whopping million dollars more per person than seen in Q4 2019.
But LBA Ware Founder and CEO Lori Brewer said loan teams should be cautious as signs the refi train slowing down are starting to show.
“As rates are predicted to rise in 2021 and for several years to come, loan teams that wish to maintain their earnings would do well to put a strategy in place that enables them to offset waning refi volume with more purchase volume,” Brewer said.