Tags: mortgage | refinancing | rates | home | loan

Mortgage Refinancing Sinks Near a One-Decade Low on Rising Rates

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Saturday, 03 March 2018 11:15 AM

Years of low interest rates have let homeowners refinance their mortgages on more favorable terms, or even cash out some of their equity to send a kid to college or redo a kitchen.

Those were the days, my friend. An increase in U.S. mortgage interest rates is throwing ice water on the great American refi -- and choking off business for lenders. Refinancings as a share of home loan applications fell to 41.8 percent last week. With a couple of exceptions, that’s the lowest level since the financial crisis in 2008, according to data from the Mortgage Bankers Association. 

The average 30-year fixed rate for conventional mortgages was at a four-year high of 4.64 percent last week, according to the MBA, and is expected to rise to 4.9 percent this year, with the share of refinancings dropping to about 30 percent. 

The biggest wave of mortgage refinancings went from 2011 to 2013, when interest rates were hovering near record lows. The next steep decline in borrowing costs created a refi boomlet from 2015 to 2016.

Now, most homeowners who wanted to take advantage of cheaper borrowing costs have already done so. Those blocked by poor credit or insufficient equity face rising rates.

Said Joel Kan, an economist with the MBA: “I think a lot of borrowers are out of the money.”

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Years of low interest rates have let homeowners refinance their mortgages on more favorable terms, or even cash out some of their equity to send a kid to college or redo a kitchen.
mortgage, refinancing, rates, home, loan
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2018-15-03
Saturday, 03 March 2018 11:15 AM
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