If you are in the market for a house and a mortgage, you may be wondering how coronavirus is affecting the situation. Refer Market Watch, March 15, 2020

Even as concerns mounted regarding the coronavirus pandemic, mortgage rates increased this past week as lenders sought to stem the tide of people looking to refinance their home loans.

The 30-year fixed-rate mortgage averaged 3.36% for the week ending March 12, up from 3.29% the previous week, Freddie Mac FMCC, +21.98% reported Thursday.

The 15-year fixed-rate mortgage, meanwhile, fell two basis points to an average of 2.77%. The 5-year Treasury-indexed adjustable-rate mortgage averaged 3.01%, down sharply from 3.18% last week.

Last week, 30-year fixed-rate mortgages hit an all-time low since Freddie Mac started tracking loan rates in 1971. That triggered an avalanche of mortgage applications from borrowers looking to lock in the lowest interest rates they’ve likely seen in their lifetimes. Refinancing volume hit its highest level since April 2009, the Mortgage Bankers Association reported Wednesday.

Mortgage rates were driven lower largely by the steady decline in bond yields in response to concerns about the economic impact the COVID-19 coronavirus outbreak would have. Mortgage rates typically track the yield on the 10-year Treasury note TMUBMUSD10Y, 0.981% , which actually touched an all-time low of 0.39% this past week.

So, why then did mortgage rates increase? That comes down to a lender’s capacity. Experts had warned that most lenders did not have the staff to handle an increase, in part because lenders had been letting go of employees in 2018 and 2019 in anticipation of higher rates causing lower demand for loans. “Most big lenders were scaling back their mortgage business,” said Vishal Garg, founder and CEO of Better.com, an online direct mortgage lender.

Without the staff to handle the deluge of applications, lenders are facing an uphill battle to close loans. Some companies are now offering rate locks as long as 100 days, in anticipation of how long it may take to close loans at the moment, said Tendayi Kapfidze, chief economist at LendingTree TREE, +10.84% .

“Basically, each employee is processing 2.5 to 3 times as many loans as they were a year ago,” he said. “That really tells you the kind of jam lenders are in.”

Therefore, lenders have turned to the main tool in the arsenal to reduce demand: Rates. Many major lenders have opted to increase rates in an effort to dissuade people from applying for mortgages right now and give them a chance to work through the applications they’ve already received.

Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net or call at 727 447-2418.