Mortgage rates manage another dip to 2.94%

Mortgage rates manage another dip to 2.94%
The average 30-year fixed rate mortgage managed another dip last week, falling two basis points to 2.94%, according to Freddie Mac‘s PMMS. Since the most recent peak in April, mortgage rates have declined nearly a quarter of a percent and have remained under 3% for the past month.

Despites last week’s rates mirroring closer to what was seen in February, Sam Khater, Freddie Mac’s chief economist isn’t convinced they will last.

“The low mortgage rate environment has been a boon to the housing market but may not last long as consumer inflation has accelerated at its fastest pace in more than twelve years and may lead to higher mortgage rates in thesummer,” Khater said.

The Mortgage Bankers Association reported on Wednesday that borrowers finally got wise to the continued drop in rates and pushed mortgage applications up 2.1% after weeks of declines. So much so, the decline in rates helped the refinance index reach its highest level in eight weeks, driven by a 4% increase in conventional refis.

“Low rates offer homeowners an opportunity to lower their monthly payment by refinancing and our most recent research shows that many borrowers, especially Black and Hispanic borrowers, who could benefit from refinancing still aren’t pursuing the option,” said Khater.

A Wednesday research note from Freddie Mac’s economic and housing research group found that nearly 40% of all surveyed households could save at least $100 per month from refinancing at today’s rates ― this percentage is nearly 50% for Black and Hispanic borrowers and 38% for White borrowers. Moreover, nearly 15% of all borrowers could save at least $200 per month from refinancing, and this percentage is nearly 20% for Black and Hispanic borrowers and 13% for White borrowers.

A quarter of a drop in rates is significant when it comes to ushering borrowers through the refi door. In April, a 10-basis point drop gave 2 million high quality candidates the potential to save at least $300 a month, according to Black Knight. That’s a potential $3.6 billion back in to homeowners pockets.
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Source: https://www.housingwire.com/rss