You may have noticed that this year was a tough year for mortgages. In fact, the statistics over the last year backup this in a tragic way. Interest rates have been rising every single week over the past year. That has resulted in a lower incentive for homeowners to refinance their mortgage. Which is what caused the lowest mortgage refinances point in the last decade.
Last week there was another change that further effected this low point. There was yet another drop in people looking to refinance their home mortgage. The Mortgage Bankers Association have informed the public that the applications for mortgages over the last week was almost completely the same as the week before.
The amount of mortgage applications filed over the last week was at the lowest point it has been in the last decade. The last time the application rate was this low was before 2008, during the crash. What does that mean? Could there be another major financial crush approaching? If you are considering refinancing your home, now might not be the right time.
The increase in mortgage application from last week was almost entirely unchanged. It has only rise 0.9% than the week before, which is extremely low. The reason for this might be the increase in mortgage rates. For a 30 year fixed rate mortgage you will be paying 4.69% rather than the previous rate of 4.65%. The total points are gone down from 0.58 to the one of the all time lows 0.45 points for loan to value ratio loans in 80% of the cases. This is the biggest drop we have experienced since the beginning of 2014.
As expected, this increase in interest rates has a negative effect on applications made for mortgage refinances. Homeowners looking to refinance their home are holding off and the overall applications fell by 2% from the week and an entire 18% from this point last year. Last year interest rates were lower, which will explain the big decrease.
If we compare the current data for mortgage refinances application over the last decade (since 2018), we will see a huge decrease. We need to compare the refinance section of the total number of mortgage application and the number is 40%, which is the lowest it has been since 2008, over 10 years ago.
The upside of this is that when we look at the big picture, it is not as frightening as it was ten years ago. There’s some good news in the mortgage market. Mortgage applications for people looking to buy a home have increased slightly from this point last year. This week has had 3% more applications for regular home mortgages compared to this point last year.