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LendingTree Finds Average APRs Offered to All Borrowers Fell During COVID-19 Crisis

The COVID-19 pandemic has had a profound impact on the United States’ economy, causing many businesses to shut their doors and forcing tens of millions of Americans out of their jobs. It has also resulted in lenders offering lower APRs to homebuyers and refinance borrowers.

While these low APRs cannot offset all of the economic damage caused by the coronavirus, they’ve given some homebuyers and refinancing homeowners a chance to lower their monthly payments and reap greater long-term savings.

To analyze just how far rates have fallen in the wake of the coronavirus crisis, LendingTree ranked the nation’s 50 largest metros by their year-over-year percent decline in both purchase and refinance APRs. Our findings show that while APRs for both purchase and refinance loans have fallen from 2019 in all of the nation’s largest metros, some markets have experienced larger declines than others.

Key findings

  • Across all 50 of the nation’s largest metros, the average APR offered to borrowers looking to purchase a home fell by 17% from April 2019 to April 2020. In April 2019, the average APR for all 50 metros was 4.75%; it fell to just 3.92% in April 2020.
  • The percent decrease in the average APR offered to refinance borrowers across the 50 largest metros is greater than it was for purchase borrowers, at 19.6%. This decline resulted in an average APR of 3.71%, down from 4.61% in April 2019.
  • Purchase borrowers in San Jose, Calif., Nashville, Tenn. and Cleveland saw the largest percent decline in APRs since 2019. In April of this year, the average APR for purchase loans across all three metros was 3.76%, decreasing by 21.8% from an APR of 4.80% in April 2019.
  • While APRs offered to purchase borrowers have declined the least in Buffalo, N.Y., Hartford, Conn. and Indianapolis, they’re still notably lower than they were a year ago. The average APR across all three metros decreased by more than 10% in April 2020, to 4.34%.
  • APRs offered to refinance borrowers decreased the most in Hartford, Conn., San Francisco and San Jose, Calif. Across all three metros, the average APR was 3.53%, dropping by about 21% from April 2019.
  • Buffalo, N.Y., New Orleans and Providence, R.I., saw the smallest percent declines in APRs offered to refinancers from 2019 to the present. However, the average APRs offered to refinance borrowers in the three metros still dropped by more than 17% to 3.90% in April 2020.

Metros with largest year-over-year percent decline in average purchase APRs

No. 1: San Jose, Calif.

  • Average APR – April 2019: 4.75%
  • Average APR – April 2020: 3.70%
  • Percent decline from April 2019 to April 2020: 22.04%

No. 2: Nashville, Tenn. 

  • Average APR – April 2019: 4.72%
  • Average APR – April 2020: 3.69%
  • Percent decline from April 2019 to April 2020: 21.8%

No. 3: Cleveland 

  • Average APR – April 2019: 4.94%
  • Average APR – April 2020: 3.88%
  • Percent decline from April 2019 to April 2020: 21.56%

Metros with smallest year-over-year percent decline in average purchase APRs

No. 1: Buffalo, N.Y.

  • Average APR – April 2019: 5.10%
  • Average APR – April 2020: 4.59%
  • Percent decline from April 2019 to April 2020: 10%

No. 2: Hartford, Conn.

  • Average APR – April 2019: 4.72%
  • Average APR – April 2020: 4.25%
  • Percent decline from April 2019 to April 2020: 10.09%

No. 3: Indianapolis 

  • Average APR – April 2019: 4.67%
  • Average APR – April 2020: 4.17%
  • Percent decline from April 2019 to April 2020: 10.79%

Metros with largest year-over-year percent decline in average refinance APRs

No. 1: Hartford, Conn.

  • Average APR – April 2019: 4.70%
  • Average APR – April 2020: 3.71%
  • Percent decline from April 2019 to April 2020: 21.15%

No. 2: San Francisco 

  • Average APR – April 2019: 4.39%
  • Average APR – April 2020: 3.47%
  • Percent decline from April 2019 to April 2020: 21%

No. 3: San Jose, Calif. 

  • Average APR – April 2019: 4.32%
  • Average APR – April 2020: 3.41%
  • Percent decline from April 2019 to April 2020: 20.97%

Metros with smallest year-over-year percent decline in average refinance APRs

No. 1: Buffalo, N.Y.

  • Average APR – April 2019: 4.89%
  • Average APR – April 2020: 4.10%
  • Percent decline from April 2019 to April 2020: 16.12%

No. 2: New Orleans

  • Average APR – April 2019: 4.67%
  • Average APR – April 2020: 3.84%
  • Percent decline from April 2019 to April 2020: 17.87%

No. 3: Providence, R.I.

  • Average APR – April 2019: 4.59%
  • Average APR – April 2020: 3.77%
  • Percent decline from April 2019 to April 2020: 18.01%

Methodology

This study uses MyLendingTree data to determine the average APR for 30-year, fixed-rate purchase and refinance loans in each metro.

Borrowers who use LendingTree to shop around for a loan enter data, including home type, home location and household income. These details, along with additional information (including credit score), are sent to lenders who then create an offer based on an individual user’s profile.

By averaging APRs offered to users in each of the nation’s 50 largest metros, LendingTree calculated the percent change from April 2019 to April 2020 in order to create the rankings used in this study.

LendingTree research analyst Jacob Channel contributed to this study.

 

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