Interest rates have surged in the opening weeks of 2018

Fri, Apr 06, 2018 at 8:33AM

Interest rates have surged in the opening weeks of 2018

Interest rates have surged in the opening weeks of 2018, raising uncomfortable questions about how much higher they can go before home purchases become unaffordable.

But there’s one area of the housing market where the impact is already being felt. Approximately 1.4 million Americans lost the interest rate incentive to refinance their mortgages in the first six weeks of 2018, according to an analysis from real estate data provider Black Knight.

The benchmark 30-year fixed-rate mortgage averaged 4.43% during the week ending March 1, according to Freddie Mac’s weekly survey. That was up three basis points from the prior week and leaves rates nearly half-a-percentage point higher than the level at which they started the year

Whether or not a refinance makes sense depends on a lot more than just being able to seize a lower interest rate. Borrowers have to have enough equity in the home, and appear creditworthy—to have a job and have been paying the existing mortgage faithfully, in other words.

That’s why as recently as last year, even after years of interest rates being stuck at rock-bottom lows, millions of Americans would still have found a refinance helpful, according to Black Knight’s analysis.

Those other considerations aren’t immaterial. Data from the Mortgage Bankers Association shows that mortgage applications for refinances held steady throughout January, even as rates jumped. It wasn’t until mid-February that they turned sharply down: the number of applications to refinance in the week ending February 23 was nearly 10% lower than the same period last year.

Industry participants believe many Americans are rushing to get ahead of rates that are only expected to go higher from here.

In the past, when rates have risen, the average credit score of refinance originations has usually declined, Black Knight noted. That’s because more financially savvy borrowers, who usually have better credit scores, tend to jump at the best rate opportunities.

Meanwhile, most housing finance experts expect the shift away from refinances to bite into overall mortgage lending this year. Refis were about 35% of all mortgages last year, according to data compiled by the Urban Institute; experts they surveyed expect that to decline to 27% this year. (In the most recent weekly data from the Mortgage Bankers, refis were 42% of all applications, down from 44% the prior week.)

Also of interest: higher rates are impacting how Americans think about which type of mortgage to choose. The share of mortgage applications for adjustable-rate mortgages jumped to 6.7% in the most recent week, MBA said. It’s ticked up every week in 2018.

Bookmark & Share

User Comments

Be the first to comment on this post below!

Popular tags on this blog

Al Capone | Bella Collina | Broker Associate Wendy Morris Realty | Celebrity Homes | Disney News | Drones | Foreclosure | For Sale Cannon EOS 7D Cameras Plus all the Lens | Hamilton Gardens Winter Garden Ryan Homes | How to Price your Home for Sale in Orlando Fl | Landlord | Marketing | New From Our Broker Wendy Morris | ORLANDO HOUSING MARKET REPORT - AUGUST 2018 | Orlando Market Reports | Orlando Penthouses | Orlando Real Estate Market report 2019 | Queen of Versailles Jacqueline Siegel | David Siegel Windermere Lake Butler Sound | STAR WARS GALAXY?S EDGE | Summerport Windermere Fl | Waterfront Homes Clermont | Wendy Morris | Wendy Morris Realty | Wendy Morris Realty Marketing | Windermere Fl |

All listing information is deemed reliable but not guaranteed and should be independently verified through personal inspection by appropriate professionals. Listings displayed on this website may be subject to prior sale or removal from sale; availability of any listing should always be independent verified. Listing information is provided for consumer personal, non-commercial use, solely to identify potential properties for potential purchase; all other use is strictly prohibited and may violate relevant federal and state law. The source of the listing data is as follows: | Stellar MLS (updated 7/29/21 4:31 AM)

Listing Search

Translate Tool

Featured Listings
Windermere Real Estate
3.5 BATH
Professional photos coming Thursday. Perfect opportunity to live in the heart of WINDERMERE in the private and gated com... Read More
Windermere Real Estate
Beautiful 5 bedroom 3 bath home in Summerport community walking or short bike ride to 3 A rated schools. Inside profess... Read More
Windermere Real Estate
2.5 BATH
Terrific Ashton Woods built home in fabulous Lakes of Windermere! ENTIRE INTERIOR RECENTLY PROFESSIONALLY REPAINTED!! Th... Read More
Windermere Real Estate
WOW NO HOA. This 3 bedroom 2 full bath home is perfect. Sits on 1/3 acres with both a big front and back yard. This is a... Read More
Windermere Real Estate
Windermere 3BD/2BA condo for under $260K! Lakeside at Lakes of Windermere is located on 535 close to shopping and more.... Read More
Contact Wendy Morris


Wendy Morris LLC
DBA Wendy Morris Realty
Licensed in the State of Florida
BK 3146762
11256 Lemon Lake Blvd
Orlando, FL 32836

Your privacy is our utmost concern. We will never sell your personal information. Privacy Policy
©2011 -2021 windermerehomes.net - all rights reserved. | Site Map