Hey there! Guess what? The Mortgage Bankers Association just reported that due to a drop in borrowing costs, there has been a big surge in homeowners refinancing their homes in the week ending June 7th.
The MBA’s Refinance Index shot up by 28% in one week and by 28% compared to the same time last year. The Purchase Index also grew by 19% week-over-week, but still lags behind by 12% compared to last year.
All this fuss is because there was a slight dip in home loan borrowing costs. The MBA pointed out that the 30-year fixed-rate mortgage now sits at 7.02%, down slightly from the previous week’s 7.07%. It’s fascinating to see how even the tiniest change in home loan costs can shake up the housing market.
The Chief Economist at MBA also noted that there has been an uptick in purchase activity from a seasonal perspective. And with the housing inventory looking better, potential buyers finally have more options to choose from.
According to Fratantoni, “Multiple data sources now indicate that the home inventory levels are still historically low but are significantly higher than last year, at this point in time.” This is a relief for those who have been struggling with the limited housing choices available.
In a housing market grappling with soaring borrowing costs – the highest in more than two decades – buyers have been reluctant to plunge into homeownership. The scarcity of available homes has further driven up home prices.
In the latest week stats ending June 7, homeowners have been snagging more affordable home loans than before. The VA segment, which saw the most surge in refinancing, shot up by almost 15% in the past week, up from about 13% the week before.
The MBA’s statement also mentions that “The refinance share of total mortgage applications increased from 31.1% to 35.2% the previous week.”