Refi, new loan applications set records as mortgage rate plunge

How low will they go? Mortgage rates continue falling and are creating a lot of activity in the real estate sector. At the current 3.29% rate, a $300,000 loan from just a year ago refinanced at today’s rate could save the owner about $2,000 a year. But long-time owners should do the math before refinancing because a new 30-year loan – even at a today’s lower rate – might not be the best option since it adds years of extra payments. Some – especially people with strong credit – are watching to see what rates do next week. They’re anticipating another drop. Speculation is rates will get even closer to an all-time low of 3%. Refi activity increases of over 200% are being cited by lenders. That’s good news for those who lower their monthly payments, but not-so-good news for the resales market because it means less new inventory coming onto a market that has record low inventory. New buyer applications are also increasing because the low rates are helping ease the affordability factor created by low inventory and rising prices.

Categories: REAL ESTATE