Low Mortgage Rates Are Good For Homeowners
After spiking at the end of last year, mortgage rates have spent most of this year falling. Now they're, once again, a motivating factor for potential home buyers. But they're also good for existing homeowners. So much so that Fannie Mae's latest outlook sees a refinance boom ahead. “Mortgage rates are approaching their lowest level in recent decades, and as they have moved lower, more and more homeowners are finding incentive to refinance,” Doug Duncan, Fannie Mae's senior vice president and chief economist, said. “We estimate that 35 percent of outstanding mortgages are now 'in the money,' meaning borrowers may realize significant cost savings by refinancing; as such, we expect the share of refinance originations to grow through the remainder of the year.” However, though favorable rates are helping to increase refinance activity, the purchase mortgage market may not see the same boost. That's because a lower-than-normal number of homes available for sale means hopeful home buyers may have difficulty finding a home to buy unless inventory picks up. More here.