Refinancing Drives Increased Demand for Mortgage Loans

Refinancing Drives Increased Demand for Mortgage Loans
In the last week of July, the 30-year mortgage rate dropped to a three-week low from 5.36 to 5.17. The Mortgage Bankers Association credits that drop in rates for increasing refinancing applications. July was a powerhouse month as the MBA’s Refinance Index shot up 35% over end of June numbers, and refinances accounted for 54.2% of the total loan applications. It must be noted, however, that these totals still do not match the rates and activity experienced in the spring, particularly in the month of March. Still, analysts are optimistic that the market is beginning to stabilize and find its bottom.

Uvestor Opportunity:
Okay, so loan refinancing is carrying the increase in overall loan applications. How does it help an investor when people are staying put in their homes and are maneuvering into better positions to stay in their homes long term?

First, that means the rates must be favorable. Your potential buyers will be excited about those same rates and more likely to pull the trigger on a sale.

Next, consider that this could help stabilize inventory. No one wants to see a year’s worth of backlogged inventory jamming up the market and competing with those who are positioned to buy and sell quickly.

Aspiring first-time homeowners are not the ones refinancing, so this leaves a motivated and eager portion of the market. Incentives are in place for these buyers, so the wise move is to target marketing toward them. Stay educated on the latest incentives so that knowledge can be passed on to potential buyers.