Mortgage refinancing surges as interest rates resume rising

After interest rates resumed rising with the stock market, the temporary surge in demand for refinancing mortgages intensified rapidly.First horror from COVID Due to the Omicron variant, interest rates fell for about four days and borrowers were rushed to lenders, after which interest rates rose sharply again and became a little seesaw last week.

As a result of the sharp fluctuations, the average contract interest rate for a 30-year fixed rate mortgage that fits the weekly loan balance ($ 548,250 or less) remained at 3.30% and the points remained at 0.39 (including origination fees). .. ) For loans with a 20% down payment.

Mortgage refinancing applications were down 6% that week, down 41% from the same week a year ago, according to the Mortgage Banking Association’s seasonally adjusted index. At this point last year, the rate was about 45 basis points lower.

A sign promoting mortgage rates for purchases or refinancing at Bank of America in New York.

Scott Mlyn | CNBC

“Few homeowners have a strong incentive to refinance at current interest rates,” said Joel Kang, an MBA economist.

According to mortgage data and analytics firm Black Knight, interest rates on about a quarter of all borrowers are less than 3%, between 3% and 3.5%. In general, borrowers need to reduce about 50 basis points from their current rates in order to refinance for the cost.

Mortgage applications increased by just 1% each week, down 9% from the same week a year ago. Housing demand is strong, but supply is weak and prices continue to rise at a fast pace. The trajectory of rising mortgage rates in the future has not helped homebuyers, especially those who are new to home with little extra budget.

Mortgage rates were stable to start this week, but all bets were off Wednesday afternoon when the Federal Reserve made its latest announcement on monetary policy. Although mortgage rates do not follow the federal funds rate, they are significantly affected by the Fed’s purchase of mortgage-backed securities. With its support since the beginning of the pandemic, mortgage rates hit record lows of 12 last year. It’s almost over.

“The Fed is likely to announce a quicker termination of its bond purchase program. The target end date for bond purchases implicitly indicates a time frame in which the Fed is considering hiking rates for the first time since it lowered interest rates to zero. It would suggest that the beginning of a pandemic. ” Mortgage News Daily Chief Operating Officer Matthew Graham wrote.

Mortgage refinancing surges as interest rates resume rising Mortgage refinancing surges as interest rates resume rising

Exit mobile version