How low will they go? Low mortgage rates increase refinance applications.
It's no secret the housing market has been steadily improving over the last few years. Property inventory is low and even though mortgage rates are still very low, many people aren’t ready to make the investment in a new home – or they simply can’t find one they like. That could be why the majority of mortgage applications are actually refinance applications. People are still taking advantage of the favorable rate market for homeowners, but without taking on additional or new debt.
Refinance applications have dropped when compared to the first quarter of 2015. That being said, in early April the mortgage rates dropped to 3 year lows and refinance applications spiked again.
Keep in mind, the Federal Reserve has already begun its tightening cycle and is widely expected to further raise rates as the year progresses.
So here we are. Rates near three year lows, a tightening cycle underway, and the Fed indicating its desire to raise or “normalize” rates after being highly accommodative for almost a decade.If refinance is something you’ve considered, time may be running out to lock in a low rate. Economic data clearly indicates that the US economy is improving. The unemployment rate has now dropped below 5% after reaching double digits in the depths of the great recession. History tells us an improving economy leads to higher interest rates - not lower.
Midwest Equity Mortgage, LLC can work with you to evaluate your financial situation and how a refinance could save you money now and in the future. We also have loan specialists who are familiar with the latest trends and news in the mortgage industry. They can advise you if and when refinance makes the most sense for your personal needs.
Give us a call today to get connected with a dedicated specialist!
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