Mortgage rates inched higher last week, prompting more buyers and homeowners to retreat from taking out loans.
Total mortgage application volume, which includes refinancing and home purchases, dropped 2.6 percent last week on a seasonally adjusted annual basis, the Mortgage Bankers Association reported Wednesday. The index is now 20 percent lower than a year ago.
Refinancing saw the largest drop last week at 5 percent. Refinancing applications are 38 percent lower than the same week a year ago, when interest rates were lower.
Mortgage applications for home purchases dropped 1 percent during the week. However, purchase applications are still 10 percent higher than a year ago.
The average on a 30-year fixed-rate mortgage rose to its highest level since July last week at 4.22 percent, the MBA reports.
“Rates increased last week as speculation over the next Fed chair continued, and the European Central Bank announced plans to taper its asset purchase program, signaling increased confidence in the euro zone economies,” says Joel Kan, an MBA economist.
However, investors are feeling confident the Fed won’t move rates at its next meeting and will instead choose to do so at its December meeting, writes Matthew Graham, chief operating officer of Mortgage News Daily. Instead, investors are more closely watching President Donald Trump’s pick to replace current Federal Reserve chair Janet Yellen. He’s expected to make his announcement on Thursday.
Source: “Weekly Mortgage Applications Fall 2.6% as Rates Move Even Higher,” CNBC (Nov. 1, 2017)
article written by DAILY REAL ESTATE NEWS and shared from RealtorMag
Nearly 4.5 million borrowers are eligible to refinance and could lock in savings on their monthly mortgage payments but have not taken advantage, according to a new report from Black Knight Financial Services.
The average borrower stands to save $260 a month. Nearly 700,000 borrowers could save $400 or more per month, the report shows.
“The recent pause in the upward movement of interest rates continues to encourage late-to-the-game borrowers to refinance,” says Lynn Fisher, the Mortgage Banker Association’s vice president of research and economics.
But many owners are not refinancing, despite the potential savings.
“Our data doesn’t tell us about motivation,” says Ben Graboske, senior vice president of data and analytics at Black Knight Financial Services. “It leaves us to surmise that the reason is apathy, lack of awareness, and education.”
Some homeowners may still be underwater on their home loans, owing more than what the home is currently worth. Other owners may have a low credit score that is blocking them from taking advantage of lower rates.
Still, owners likely will have more time to take advantage. “I don’t think this will be the last opportunity [to refinance into a low rate], but I don’t have a crystal ball,” says Graboske. “There are enough pressures in the market—lenders getting more efficient—that we’re going to have competitive rates around for awhile.”
Source: “Reason to Refinance: 4 Million Homeowners Are Leaving $1 Billion on the Table,” CNBC (June 22, 2017)
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