Monday, August 21, 2017

Mortgage Interests Rates Lowest Since 2016 Election

Mortgage rates today are the lowest they’ve been since the election last November, but that did little to encourage people to either refinance their mortgage or take out a new loan to purchase a home. Typically, when rates drop, applications to refinance home loans rise – which they did, 2% up from last week – but they are still down 40% from last year. The average mortgage rate last year was 3.45% and now it’s 3.90%; so naturally it would make sense that more activity would occur last year, but mortgage applications to purchase a home specifically fell 2% over the week but remains 10% higher than last year.

So, what does this mean?

Refinancing is down from last year realistically since many have already refinanced at rock-bottom rates, so the pool of potential applicants is shrinking even though more people applied to refinance this week than last week.

And the lower rates did virtually nothing for home-buyers because prices are so high due to the lack of inventory available, but it seems more have taken advantage of lower rates throughout the last year.

Total mortgage application volume, all-in-all, is up 0.1% over the last week and down 22% over the last year. It’ll be interesting to see how this fluctuates throughout the rest of the year as The Fed unwinds some of its “Quantitative Easing” scheduled to begin in October.


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