Whether it’s because of slightly higher mortgage rates or the temptation to take their first summer vacation in two years, American homeowners have pulled out of the refinancing market.
A survey by the nation’s largest mortgage association shows that the number of applications for refinancing and purchasing mortgages has decreased, while the demand for refinancing loans has dropped significantly.
If homeowners hope that the COVID delta explosion will bring mortgage rates back to record lows, they might be disappointed. Just one encouraging economic report is enough for rates to go up last week.
Today’s rates that are still historically and seductively lowmaybe as good as it gets.
Lightning prices, falling demand
For the week ending Aug. 13, mortgage applications fell 3.9% from a week earlier, the Mortgage Bankers Association. reported on wednesday… This was the largest weekly decline in mortgage demand since July 21, when overall application activity fell by 4%.
The biggest drop in the last week was a significant drop in refinancing applications, which fell 5% compared to the previous week. They are down 8% from the same week a year ago.
Joel Kahn, an MBA associate vice president for economic and industry forecasts, attributes the drop to higher mortgage rates.
“Mortgage rates were at their highest in about a month, with the 30-year fixed rate rising from 3% to 3.06%,” says Kahn.
The number of applications for home loans used by home buyers fell by a more modest 1% as high home prices and limited supply continued to create barriers for new buyers hoping to break into the country’s housing market.
Don’t Wait For Peak COVID Mortgage Rates To Return
If you’re a homeowner putting off refi because spending time with your family – you know, with other people – is your # 1 priority this summer, it’s something no one can blame you for. Enjoy.
But if you hold on just because you think you’ll have a chance find the best rate than what’s available today, don’t count on it.
Note that Kahn links the recent hike in mortgage rates to a better-than-expected July jobs report that the government released on Aug. 6. As more evidence emerges of an American economic recovery, rates may rise faster.
It’s also important to remember that the ultra-low mortgage rates that homeowners have enjoyed for much of the past 18 months might never have materialized without widespread lockdowns that have wiped out the incomes of millions of businesses and individuals.
Even with the COVID stamping delta option in the US, there was no indication that new bans or household orders would emerge. If an economy is open, it has potential for growth. And when the economy is booming, interest rates tend to follow suit.
Refi can still make a difference
Even with a gradual increase in rates, refinancing can still save eligible homeowners a ton of money.
BUT recent poll Using a digital real estate platform, Zillow found that nearly half of US homeowners who refinanced between April 2020 and April 2021 saved $ 300 or more per month.
And according to the data, most of that 12-month period was higher than today. data compiled by mortgage giant Freddie Mac.
Since significant savings are still possible, here are a few steps you can take to get your lender to offer you the best rate when it’s time to pull the trigger for your refi:
Improve your credit score. The best rates are usually offered to borrowers with the most impressive credit history. Get take a look at your credit score for free and see where it falls into the bad / hard / excellent spectrum. Improving your score before applying for a refi can help you win a nicer deal.
Get rid of annoying debt at high interest rates. Lenders treat large amounts of debt at high interest rates, such as credit card balances, as a red flag. If you owe money to several high-interest lenders, consider consolidating those debts into one. low interest debt consolidation loan… You will pay less interest and pay off your debt faster.
Find the best mortgage rate. Never apply for a home loan simply because the lender claims to be offering “the lowest rates available.” Guess what: they all say so. Instead, collect and compare at least five refinancing offers to improve your chances of finding the best rate for your area and for someone with your credit history.
By setting a low refinancing rate, don’t let your savings stop there. When your homeowner insurance policy is renewed, shop around – because you can compete with an insurance company offering your current coverage at a much lower cost.
This article provides information only and should not be construed as advice. Provided without warranty of any kind.