It definitely seems like how the housing market has some serious issues. We were able to see some strange things happening in the last year, yet, the things haven’t improved much yet.
When it comes to mortgage application’s mortgage, we can now see how it has increased its volume for 1.5% (last week), which would be 12% from the previous year.
Yet, such gains haven’t been driven by homebuyers, but by refinances. Every home buyer likes to hear that mortgage ratings are falling down fast, but this time, it is still not enough to make home prices acceptable for more than half of home buyers.
For example, the average contract interest rate related to all those 30-year and fixed-rate mortgages has fallen down for 4.23%, which is 0.10% more than in the previous week.
Although this is definitely the lowest level of mortgage since the first week of 2018, only those who want to refinance are really interested in this new situation. This is especially important for all those borrowers with larger loans. So, you can guess by yourself how this situation has also affected the refinance loan index becomes the highest that it ever was. When we take a look at the data which shows us the refinances for VA loans and FHA, we can easily come to a conclusion how it went up for 11%.
Compared to 2018, that would be 33% more total refinance volume. Everyone who can benefit from refinancing now has a chance to earn literally more than $2 million. Yes, you have read that right, that is exactly how much they have already ‘drag to their pool’.
We definitely believe how something will have to happen about this situation. Home buyers are still not satisfied with the situation on the market, and we can see how others are taking advantages of the problem.