Lower mortgage refinancing rates in Texas and other states drove more Americans to apply during the week ending September 1, according to a Mortgage Bankers Association (MBA) survey.
The MBA’s Weekly Mortgage Applications Survey showed that refinancing applications have accounted for 50.9% of all mortgage transactions in the U.S. during the seven-day period. However, the volume of mortgage refinancing applications fell 23% from the same week in 2016. The experts at Altius Mortgage Group explain that mortgage refinance rates in Utah could go down too, but it all depends on many factors.
The survey recorded a 4.06% decline for a 30-year fixed-rate mortgage with conforming loan balances of at least $424,100. It was the lowest rate since November 2016. Meanwhile, the MBA said that points fell to 0.38 from 0.43, including the origination fee, which resulted in 80 percent loan-to-value ratio loans.
MBA economist Joel Kan said that “heightened geopolitical tensions” for the week ending September 1 caused mortgage rates to fall to their lowest since the 2016 elections. This also led mortgage refinancing applications to comprise nearly 51% of all mortgages in the country. On the other hand, home buyers still found it difficult to acquire properties even if rates go low. Due to a shortage of homes for sale, mortgage applications for home purchases increased only 1% for the week.
The impact of Hurricane Harvey in some states may have caused a decline in mortgage applications, whether for refinancing or purchases. In Texas, for instance, Kan said that applications for home acquisitions and refinances fell 21.7% and 22.9%, respectively.
The decline stems from several banks that suspended all mortgage activity in Harvey-damaged areas since approval will only be granted after evaluating damages and reappraising house before a refinancing or purchase.
Homeowners with existing mortgages should take advantage of a decline in interest rates for refinancing since they could negotiate a better payment scheme or a shorter payable period.