The sign “For Sale by the Owner” has been posted in front of the property in Monterey Park, California.
Frederick J. Brown | AFP | Getty Images
Home buyers are rushing for mortgages, but fewer homeowners are refinancing as rates go down to record lows.
According to the Seasonal Adjusted Index of the Mortgage Bankers Association, the total mortgage application volume fell by 2% last week over the previous week. A year ago the volume was 35% higher.
Annual profits get a huge boost from home buyers. Mortgage applications for a home purchase fell 0.2% during the week, but 28% more than the previous year. Last year, annual earnings were in the single digits below the purchase requirement.
“Lenders report strong demand for housing from late spring operations, as well as families looking for more space in less populated areas,” said MBA economist Joel Conn.
This demand is driven by lower mortgage rates. The average contract interest rate for 30-year fixed-rate mortgages, which stabilize debt balances up to $ 510,400, fell from 3.11% to 3.08%, while points, including appearance fees, fell from 0.38 to 0.36 for loans with a 20% lower rate.
The fall in rates has done little to motivate current borrowers. Applications for home loan refinancing are down 3% per week, although they are 40% higher than they were a year ago. At the beginning of this year, refinancing was 100% higher annually.
“Regular and government refinancing activities declined last week, although 30-year fixed and 15-year fixed mortgage rates fell to historic lows,” Khan said. “Mortgage rates are now lower than 3.5% for five months, and this could potentially reduce the need for refinancing and not increase significantly again without another significant drop in rates.”
Mortgage rates have been falling again this week, and now it is down to a three-week low, according to the Mortgage News Daily. The new charges levied on lenders, which initially caused rates to rise, are part of a recent announcement that they will be delayed until the end of the year. Another area is simple bond basics.
“The central bank is setting the stage for the market to deliver lower rates and higher bond purchases in the long run with less concern about inflation figures holding back most of them,” said Matthew Graham, CEO of Mortgage News Daily.