Phil Aitken
Phil Aitken

Time to Refinance?

As home loan rates have decreased since 2018, significant savings abound for anyone who has purchased a home in the past two years and is contemplating refinancing.  For example, those who hold a $250K mortgage could save roughly $2,200 annually as rates are currently down by 1.25%, the lowest since 2016.  Unfortunately, this is not good news for home shoppers who are still on the hunt due to general economic concerns.  

While refi applications have more than doubled since last year, they were down eight percent last week in contrast with the preceding week. This is still considerably higher than the applications received in July of this year. Refis soared 37% above norms two weeks ago. While now is a great time for a refi, overall mortgage applications for new buyers are surprisingly low given current interest rates. For example, the average 30-year-fixed-rate mortgage loan under $484,350 is hovering right at an impressive 3.94%

Low mortgage rates typically result in increased mortgage applications, however low inventory cannot keep up with high demands for housing both new construction and pre-existing. Prices are making it difficult for new home buyers who would otherwise be eager to submit mortgage applications.

The possibility of a recurring recession is of most concern for would-be buyers and likely contributes to the discrepancy between expected mortgage applications versus that which has been submitted thus far.   The good news is that home prices are gradually stabilizing as sales prices increased 3.1% in July with a gain of 3.3% in May.  A healthy economy is manifested in-home price growth that is consistent with increased wages.  When prices rise and wages do not, the housing market cannot be sustained.  

Related: “Fannie Mae & the “Due-On-Sale” Clause

Related: “Predicting on a Curve

For more information, contact The Aitken Home Team today!

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Phil Aitken, Owner/Broker
Phil Aitken is the Owner/Broker with Your Home Sold Guaranteed Realty - Phil Aitken Home Team and has over 13 years of Real Estate experience. Phil’s faith and desire for his family’s continued security fuel his business growth and leadership. The Phil Aitken Home Team continues to profoundly impact the people of Jacksonville via supporting several faith-based organizations. Phil gives back a portion of every real estate transaction to The Tim Tebow Foundation and Rethreaded. Find Phil's full story here.