According to a recent study, mortgage activity fell last week to its lowest level since early 2020. This happens at a time when the housing market usually reaches its annual peak.
conclusions Mortgage Bankers Association (MBA) weekly survey come because mortgage interest rates are historically low, but limited housing stock and high home prices make it difficult to buy a home. However, as demand for home purchases falls, this could signal a shift towards cooler housing market it is more customer friendly.
Even the number of applications for refinancing mortgage loans continues to fall, despite the fact that refinancing rates remain close to record lows.
If you have been considering buying a home or refinancing your mortgage, it is wise to proceed while the rates are still low. Read on to learn more about the findings of the MBA and visit Credible to compare mortgage rates without affecting your credit rating.
Buying a house is not easy now, but it can get easier
The MBA Home Purchase Index is 14% lower than a year ago, indicating a significant decrease in buying activity, despite the fact that mortgage rates are still at record lows. This is due to the fact that demand from home buyers exceeds the available inventory, which leads to a sharp increase in the value of homes and make the market more competitive across the spectrum.
According to Joel Kahn, MBA’s assistant vice president of economic and industry forecasting, aspiring home buyers looking at the lower end of the home value range face the biggest challenges. While stocks are scarce across the board, they are most limited for buyers in the lower price range.
You don’t see much activity on the downside of the market. The lower end of the market is also where inventories are highest, where they are most competitive for buyers. This is also where you will see the largest increases in home prices, which is holding back some buying activity.
Even low mortgage rates cannot generate higher demand for mortgages simply because inventory is not available. But there is good news: experts expect more inventory to flood the market this fall, as lumber and steel prices will level off as the supply chain continues to recover from the pandemic.
But today’s competitive mortgage rates don’t last forever. According to MBA estimates, by the end of the year the average mortgage rate will rise to 3.5%. In addition, interest rates on 30-year mortgages will continue to rise over the next two years, reaching 4.2% in 2022 and 4.9% in 2023. This is up from 2.8% in 2020.
If you are planning to buy a home soon, it is important to pre-qualify now so you can take advantage of the current rates. You can prequalify through multiple mortgage lenders directly to Credible without affecting your credit score.
Home Loan Claims Are Falling But Still A Good Time To Refinance
While stocks may deter some potential buyers from getting a mortgage, there is no reason homeowners should not consider refinancing their mortgage – and quickly. According to the MBA index, refinancing activity is 8% lower than a year ago. But as mortgage rates are projected to rise, refinancing is becoming less and less attractive.
If you haven’t refinanced your mortgage yet, consider doing so now while rates are still low. TO determine if refinancing is right for you.Ask yourself:
- What is my current mortgage rate? Refinance only if you can secure a lower mortgage rate than what you are currently paying.
- What is my net worth? A good rule of thumb is that you should have at least 20% of your home equity, but you can refinance less.
- How long will I live in this house? Refinancing comes with closing costs, so make sure you pay back your savings before planning your move again.
- How much can I afford to pay each month? If you can afford to pay more on your mortgage, consider refinancing on a shorter mortgage to pay off faster and save money.
In most cases, refinancing your mortgage can help you save money on monthly payments, pay off your mortgage faster, or pay less money in interest payments over the life of the loan by providing a lower interest rate. you can use Credible mortgage calculator to estimate your monthly mortgage payment and decide if refinancing is right for you. Contact a loan officer at Credible if you have any questions about the mortgage process.
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