The mortgage rates are at their lowest but the Refi demand is falling.
The applications are down for the 7th time in 8 weeks and the numbers are very low as compared to the ones, a year earlier. This was not the first time that the homeowners had turned their backs on solid savings.
78% of homeowners had never refinanced amidst the low rates available to them from April 2020 to April 2021.
Refi demand was low, but the people who di it saved $300 or more in a single month.
Borrowers may not have much more time to snag a low refinance rate, now that COVID-19 is no longer the economy-crusher it once was.
Refi Demands Have Started Sliding Again
Refi demands have dipped 2.8% in the last week which was led by a 5% dip in refinance activity. Refi demand plummeted 31% compared to the same time last year.
Homeowners have grown cold to refinancing as mortgage rates have moved higher in recent weeks.
Though rates have been climbing since early August, when 30-year mortgages were averaging 2.97% in the MBA’s survey, home loans remain much cheaper than they were before the pandemic broke. At Christmas 2019, the average was a stiff 3.99%.
New coronavirus outbreaks are being reported in Minnesota, Michigan, and several other states, while medical experts worry that holiday gatherings and a new variant could drive a winter surge.
But thanks to vaccines and booster shots, no one is expecting U.S. case numbers to soar the way they did in January — when mortgage rates hit rock bottom. A similar boon for homeowners isn’t likely to materialize.
The spotlight has fallen on inflation instead of a recession. Prices shot up in October at the fastest pace in more than 30 years, and the Federal Reserve is under pressure to raise interest rates and pull back on its other policies that have kept mortgage rates super-low during the pandemic.
