While mortgage rates have dipped slightly in the last week or so, the overall trend for the majority of 2018 is up, up, up. In fact, rates have risen more than a half of a percentage point since January. The rise in interest rates has all but dried up the demand for refinancing. Sadly, a new report from Ellie Mae is showing that purchase loans are approaching 75% of all loans and that refinances have hit historic lows.
The biggest drop in refinancing is in Conventional loans and experts say not to look for the trend to reverse anytime soon. They also state that “The purchase market remained solid in July and as we see inventories rise, we might begin to see a transition to a buyer’s market… The summer home buying season is still in full swing and while interest rates have risen, we expect to see a continued increase in purchase percentages.”
Trends are on the upswing and many expect rates to keep pushing up. Experts also point to the fact that while historically, mortgage rates are still low, they are still higher than most Millennials and generation “Yers” have seen in their lifetime. This means anyone with a rate in the high 3s or low to middle 4s are not going to be inclined to refinance – no matter how much their home is ultimately worth.