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Refinancing declines as the Federal Reserve caps interest rates

Last month, the Federal Reserve Board announced that they're capping interest rates where they're at for the time being. There's been a decrease in mortgage applications since then. There are signs that fewer homeowners are interested in refinancing their loans as well.

Data compiled by the Mortgage Bankers Association (MBA) shows that mortgage applications submitted decreased by 2.2% during the week ending on Nov. 15. The number of homeowners who pursued refinancing had increased by 13% as of Nov. 8. It decreased to 5% one week later.

MBA data shows that many homeowners have decided to refinance their homes in recent months. Most of them have done so to take advantage of reduced interest rates, something that would help decrease their monthly mortgage payments. Those rates hovered around 4% as of mid-November.

Financial analysts have provided some theories for why refinancing rates may have slowed despite there currently being continued lower mortgage interest rates. They argue that it may have to do with consumers thinking that these rates haven't fully bottomed out. The Federal Reserve has mentioned lower interest rates being on the horizon after all.

An MBA spokesperson argues that the refinancing slowdown may be tied to a decrease in homeowners eligible to renegotiate their loan terms. Fannie Mae's data shows that there's been a decrease in affordable housing available. Even still, MBA data shows that the demand for home building permits has increased considerably in recent months. It's currently the highest that it's been in 12 years.

There are many reasons that individuals refinance their mortgages. Some do so to reduce their monthly loan payments whereas others do so as part of property division settlements in a divorce. No matter what your reason for wanting to do this, a refinancing attorney here in Augusta can guide you through this real estate transaction in Georgia.

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