Mortgage applications went up nearly 50% last week, the strongest weekly gain since November 2008. The rates are at their lowest levels since May 2013. The mortgage rate on a 30-year fixed rate mortgage was down to 3.86%. It was 4.46% a year ago, according to Freddie Mac.
At these rates, many owners are rushing to refinance. People refinancing their mortgages made up over two-thirds of last week’s applications.
Mortgage rates are dropping because of low inflation, a strong U.S. dollar and a tame housing demand over the holidays.
The low interest rates are also creating more jobs. Building employment increased 7% in December from a year ago.