Is your institution prepared for declining mortgage interest rates?

The housing market is quite fickle. It’s impacted by economic factors that are often difficult to understand, and typically leaves consumers and lenders alike on the hunt for information in an attempt to make sense of how it will impact their financial decisions.

Earlier this year, the market began to show symptoms of softening, something unseen since 2012 when home prices began to rise again. However, when the S&P Dow Jones Indices released June 2019 data in August, home price increases were on a downward decline. So very fickle.

Experts agree that the current favorable mortgage interest rates coupled with a nationwide housing inventory shortage support refinance activity. An estimated 11.7 million U.S. mortgages have become eligible for a refinance simply due to the current low mortgage rates, according to Black Knight. And, according to Freddie Mac, the average rate for a 30-year fixed-rate mortgage in the U.S. fell to an astonishing three-year low of 3.49% as of the first week of September.

 

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