(CNN) - Mortgage rates are lower than they've been in years, causing a tsunami of refinancing.
The average rate on a 30-year fixed rate mortgage fell to 3.93% last week for loans of $484,000 or less — the first time those loans have been below 4% in nearly three years, according to the Mortgage Bankers Association, the industry trade group. Rates are even lower on larger mortgages and on 15-year loans.
That sparked a 37% jump in the number of refinancing loans last week compared to the previous week, said the MBA. Compared to a year ago, the rate of refinancing has nearly tripled.
The low rates aren't doing as much to spur home purchases, with those loans only up 2% from the previous week and 12% from a year ago. Those figures are partly due to limited availability of homes for sale. The number of existing homes sold in June fell about 2% compared to May and a year earlier, according to a separate report from the National Association of Realtors. The limited supply of homes has worked to drive up home prices, which have risen steadily for the last seven years at three times the pace of wage growth.
"Homes are going to move out of the range of many buyers in terms of affordability, and maybe that is what we are already seeing," said Chris Rupkey, chief financial economist at MUFG.
But even if homeowners can't find a home to buy, they are rushing to save money by locking in the low rates on refinancing.
"Fears of an escalating trade war, combined with economic and geopolitical concerns, once again pulled US Treasury rates lower," said Joel Kan, associate vice president of economic and industry forecasting for the MBA.
The average rate on mortgages has fallen more than 0.8 percentage points so far this year. The difference between the current a 3.93% mortgage and a 4.8% mortgage for a $400,000 loan comes to savings of about a $200 a month.
- CNN Business' Anneken Tappe contributed to this report
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