Many homeowners want to refinance their mortgages now that rates are tumbling down. On Wednesday, According to the Mortgage Bankers Association, there are many applications to refinance mortgages surged 8 percent last week because rates dropped for the fourth straight week.
MBA said that the refinancing volume increased a 2.4%% in overall mortgage applications compared to the prior week. Since January 2018, the 30-year fixed rate mortgage hit its lowest level, down from 4.4% the previous week, the trade group stated.
Joel Kan said, MBA’s associate vice president of economic and industry forecasting, “As borrowers with largest balances responded accordingly to lower rates, there was an increase in average refinance loan sizes”.
But homebuyers didn’t respond positively to the lower rates, because in a span of only a week earlier, applications to purchase a home fell 2%.
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According to the National Association of Realtors, Last month, sales of existing homes slipped 0.4% dropping for the second straight month that is why home sales also have pulled back this spring.
Kan also stated that “Purchase activity declined again, but remained around 7% higher than a year ago”. The reason for this may be because of some adverse effects of the ongoing global trade disputes on overall demand.
Kan also added that some potential buyer may delay their home search until there is more certainty.
Also, entry-level homes that have driven up their prices are a shortage of less expensive.
The Federal Housing Administration’s guaranteed mortgage applications, the share of it decreased to 9.4% from 10.1% the week prior.
Cover Photo Credit: Forbes