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The Refinancing Factor

Mortgage Rates

Falling mortgage rates caused the volume of mortgage applications to rise 1.5% since last week, according to a report by CNBC. 

The report states the increase was mostly driven by those looking to refinance, as the average interest rate for 30-year fixed rate mortgages was 4.23%.

CNBC states that refinance applications increased 6% since last week and 33% year-over-year. A recent report issued by Black Knight states that declining mortgages rates have resulted in 5.9 million refinance candidates in April, which is an increase of 2 million from March.

Mortgage rates have been on a downward trend over the past few months, and the average rate for all mortgage types fell to 4.20% in April.

The report from Black Knight adds that the 5.9 million candidates is the largest this group has been in almost three years, and represents an average of $1.6 billion in potential monthly savings by refinancing.

Of those 5.9 million, nearly 1 million eligible for refinancing took out mortgages last year.

Black Knight adds that the amount is the most of any vintage, and more than all of 2012-2017 combined, which represents not only the greatest attrition risk, but also the biggest pocket of refinance-lending opportunity.

Although mortgage applications have increased due to refinancing opportunities, applications to purchase homes dipped 2% this week, and is showing a 0.5% increase year-over-year.

A report by Redfin last month states that sale prices for new home fell 1% year-over-year in April, which was the first drop in seven years.

Sale prices for existing homes grew 1.5% from Q1 2018, which is the slowest pace in seven years. New home sales declined 3.1% year-over-year in Q1 2019, which was the third consecutive quarter of declines.

The supply of new homes saw an increase of 4.2% and Q1 2019 was the fourth consecutive period of increases. Existing home supplies rose 4.8% during the first four months of the year.

Mortgage application volume rises, driven by refinances from CNBC.

 

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
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