US mortgage rates jump after refinance rush

Mortgage rates in the US have risen after there was a rush to refinance in early March, a Zillow real estate report shows. 

Refinancing was up 479% year on-year in early March, with the Federal Reserve cutting interest rates twice to 0.25% over the period.

Since then however typical mortgage rates have jumped by a full percentage point, though they are still 0.60% lower than last year.

Unsurprisingly there are already signs the US housing market is slowing, owing to the major impact of COVID-19 on people’s lifestyles.

Jeff Tucker, economist at Zillow, said: “The U.S. housing market has entered truly uncharted territory, shaken by the COVID-19 pandemic and a corresponding, sharp economic contraction that has already caused millions of Americans to lose their jobs.

“Rock-bottom mortgage rates have provided some small financial relief for homeowners and buyers, but it hasn’t been enough to avoid a slowdown.

“The big question at the moment is to what degree measures being taken by local, state and national legislators will help limit the number of foreclosures in the months ahead.”