Although it may seem like a strange time to buy a home for some, there’s no denying that mortgage rates are currently in a homebuyer’s favor.
The coronavirus pandemic has resulted in lenders offering significantly lower average annual percentage rates (APRs) to homebuyers and refinance borrowers, according to a recent report by LendingTree.
LendingTree analyzed data from MyLendingTree to determine average APR for 30-year, fixed-rate purchase and refinance loans in the 50 largest metro areas in the U.S.
The average APR offered to homebuyer borrowers across all of the nation’s 50 largest metros fell by 17 percent between April 2019 to April 2020 from 4.75 percent to 3.92 percent.
However, refinance borrowers saw an even greater drop in average APRs during this time: average refinance APRs across all metros analyzed declined by 19.6 percent year-over-year from 4.61 percent in April 2019 to 3.71 percent in April 2020.
Those purchase borrowers in San Jose, California; Nashville, Tennessee; and Cleveland, Ohio saw the largest decreases in APRs over the course of the year, with the average APR across these three metros dropping to 3.76 percent from 4.80 percent in April 2019.
APRs for homebuyers decreased the least in Buffalo, New York; Hartford, Connecticut; and Indianapolis, Indiana, but these areas still saw an average drop in APR across the three metros by more than 10 percent year-over-year to 4.34 percent.
On the refinance side, borrowers saw the greatest decreases in APRs in Hartford, Connecticut; San Francisco, California; and San Jose, California with the average APR across these three metros dropping by about 21 percent from April 2019 to 3.53 percent in April 2020.
Buffalo saw the smallest drop in refinance APRs from April 2019, followed by New Orleans and Providence, Rhode Island. Across these three metros, the average APR dropped by about 17 percent to 3.90 percent in April 2020.