According to the Mortgage Bankers Association (MBA) Market Composite Index, the Refinance Index is 50 percent lower compared to the same week one year ago, in January 2021. During the same week there was a small uptick over last year in purchase mortgage activity.
Fannie Mae and Freddie Mac expanded a home refinance program that helps low-to-moderate income households, giving them a better opportunity to refinance now while interest rates are low. The program was launched in June of 2021, but recently the income limit qualifier was increased as well as other modifications to the program to reach more homeowners.
The mortgage loan market has had shifts over the past couple months with an up this week, down last week pattern. Within that pattern is statistics that show refinance volume has slowed while first time home buyer applications have increased.
Homeowners took advantage of February’s mortgage refinance interest rates below 3% with a resyktubg 68% of all mortgage loans being refinance loans. Although rates have slowly increased in March, the refinance activity is still very high.
Mortgage interest rate volatility continued in February with many lenders quoting interest rates higher than just a couple weeks earlier. Many home buyers and those seeking mortgage refinance are expressing concern about how high mortgage rates may increase this year.
The mortgage industry has been offering incredibly low rate loans with low or no fees. Recent weeks have seen some mortgage lenders promoting their new 1.99% fixed rate loans, but it’s important to understand the fees involved in these loans. They might be a very good choice for some borrowers but are also a very wrong choice for many.
The world is filled with news about the many impacts the pandemic has had on our lives, and most are negative: social distancing, wearing masks, education impacted by school closures, loss of jobs, and health challenges, even death.
Lenders across the US are struggling to keep up with the Mortgage Refinance Boom. The recent Federal Reserve rate cut has motivated many homeowners that were waiting for the right time to refinance to make their move and file an application. Major lenders are doing their best to meet the need including hiring new loan underwriters, processors, and closers. Purchase application volumes have also increased to the highest level in over 11 years, which is adding to the pressure on the entire mortgage industry affecting lenders, appraisers, and title companies.
The percentage of refinance loans increased to 55% in March, with growth occurring across every type of loan. The average interest rate for 30 year fixed rate loans in March was the lowest it has been since January of 2013.