Tags: Refinances | Mortgage | Rates | Home | Buyers

Refinances Spike 7 Percent Amid Lowest Mortgage Rates Since Election

Refinances Spike 7 Percent Amid Lowest Mortgage Rates Since Election
(DreamsTime)

Wednesday, 26 April 2017 11:01 AM

The refinance market surged last week as mortgage rates fell lower but homebuyers went into hiding.

Total mortgage application volume rose 2.7 percent, according to the Mortgage Bankers Association. Volume was 18 percent lower compared with the same week one year ago.

“Mortgage refinance volume remains far weaker than it was last year, when interest rates were lower, but it did rise 7 percent week to week as rates sank to the lowest level since just after following the presidential election. The size of the average refinance loan also increased, as large-balance borrowers are more rate sensitive. Refinances are still 34 percent below where they were a year ago,” CNBC reported.

The interest rates on 30-year, fixed-rate conforming mortgages, the most widely held type of U.S. home loan, dipped 2 basis points to 4.20 percent, the lowest since the week of Nov. 18. The average rate was 4.23 percent a week ago.

Conforming loans are those with balances of $424,100 or less which qualify for guarantees from federal mortgage agencies Fannie Mae and Freddie Mac, Reuters reported.

"The drop was driven by continued investor concerns about the French election, though Sunday's first-round voting results apparently have alleviated some investor fears," Lynn Fisher, MBA vice president of research and economics, told CNBC.

Mortgage rates have fallen in step with U.S. Treasury yields, which hit five-month lows last week as a result of safe-haven bids for U.S. government debt due to geopolitical tensions with Syria and North Korea, and uncertainty over the outcome of the French presidential election last Sunday. 

Doubts about whether U.S. President Donald Trump and a Republican-controlled Congress would be able to enact tax cuts and infrastructure spending while loosening regulations to boost the economy had also bolstered demand for bonds.

This week, Treasury yields have risen as investors have pared their safe-haven bond holdings on expectations that centrist Emmanuel Macron would beat far-right and anti-EU Marine Le Pen in the French presidential runoff on May 7.

On Wednesday, U.S. Treasury Secretary Steve Mnuchin said the White House plans to introduce its plan to slash corporate tax rate to 15 percent and to lower the tax on offshore earnings to 10 percent from the current 35 percent.

The recent drop in mortgage rates has revived interest from homeowners to refinance their mortgages.

(Newsmax wire services contributed to this report).

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The refinance market surged last week as mortgage rates fell lower but homebuyers went into hiding.
Refinances, Mortgage, Rates, Home, Buyers
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2017-01-26
Wednesday, 26 April 2017 11:01 AM
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