March 11 (UPI) -- Lower interest rates brought on by the outbreak of coronavirus disease has led to a substantial increase in U.S. mortgage applications, especially refinancing, an industry group said.
The Mortgage Bankers Association's weekly index this week showed overall mortgage applications has spiked 55 percent, and applications to refinance are up nearly 80 percent -- to their highest level since the financial crisis in 2009.
Applications to refinance have increased 479 percent over this time last year, the MBA figures show, and their share of total mortgage applications climbed by 10 percent to account for more than three quarters.
Interest rates have fallen to record lows due to market uncertainty over the COVID-19 outbreak. The rate for a 30-year fixed mortgage fell to 3.29 percent last week -- the lowest level ever recorded.
MBA economist Joel Kan said the drop has spurred a new rush to refinance while rates are low.
"Market uncertainty around the coronavirus led to a considerable drop in U.S. Treasury rates last week, causing the 30-year fixed rate to fall," Kan said. "Homeowners rushed in."
The surge in demand has led the association to drastically reassess its 2020 forecast.
"Taking into the account the current economic situation and how much rates have fallen, MBA is nearly doubling its 2020 refinance originations forecast to $1.2 trillion, a 37 percent increase from 2019 and the strongest refinance volume since 2012," Kan said.