Borrowers Do Not Respond To Latest Decline In Interest Rates

Although the average rate of a 30-year mortgage recently reached another all-time record low, media reports indicate that homeowners have not taken advantage of them. According to a story reported by CNBC, applications to refinance existing mortgages or to obtain financing to buy a new home declined in response to the 10th all-time low rate this year. As a mortgage broker that people have come to depend upon for trusted advice and guidance with mortgage financing, we decided to offer the MortgageDepot perspective on what is currently happening in the mortgage industry.

Fewer applications to refinance may be deceiving

The fact that homeowners did not immediately rush to submit applications to refinance existing mortgages may not mean they ignored declining interest rates. CNBC reported that applications to refinance submitted by homeowners earlier in the year were almost 100% higher than last year. The most recent drop in mortgage rates may not have been significant enough to motivate homeowners who had not already submitted applications.

Demand for homes remains strong

While people in the market for a new home did not respond to the most recent decline in mortgage rates, CNBC noted in its report that the number of applications this year have been 24% higher last year. We believe that other factors, such as saving for a down payment, may be influencing buyers.

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Anyone with questions about financing the purchase of a home or refinancing an existing mortgage should speak with one of our experienced loan officers.

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