{"id":1483637,"date":"2024-08-14T19:25:00","date_gmt":"2024-08-14T23:25:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1483637"},"modified":"2024-08-14T19:25:00","modified_gmt":"2024-08-14T23:25:00","slug":"mortgage-refi-activity-jump-most-since-2020-as-lenders-see-gloom-ending","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/mortgage-refi-activity-jump-most-since-2020-as-lenders-see-gloom-ending\/1483637\/","title":{"rendered":"Mortgage Refi Activity Jump Most Since 2020 As Lenders See Gloom Ending\u00a0\u00a0"},"content":{"rendered":"

Mortgage Refi Activity Jump Most Since 2020 As Lenders See Gloom Ending\u00a0\u00a0<\/span><\/p>\n

\n

Mortgage lenders have endured a brutal 2.5-year period of the Federal Reserve’s interest rate hiking cycle<\/strong>, with a high rate environment pressuring\u00a0refinance applications to multi-decade lows<\/strong>. However, those lenders who weathered the downturn\u2014dodging\u00a0widespread layoffs,\u00a0industry consolidation, and scraped by on\u00a0Ramen Noodles and\u00a0Zyn pouches\u2014are now seeing a serious surge in activity as mortgage<\/strong> rates slide on rising recession probabilities<\/a>.\u00a0<\/p>\n

For the week ending August 9, the\u00a0Mortgage Bankers Association’s\u00a0refinancing index jumped a whopping\u00a034.5%<\/strong> to a more than two-year high of 889.3.\u00a0<\/p>\n

<\/a><\/p>\n

The\u00a0refinancing index’s weekly change recorded the biggest weekly change since the first week of March 2020<\/strong>, a period in time when the Fed slammed\u00a0interest rates to the zero lower bound in response to the China virus.<\/p>\n

<\/a><\/p>\n

Even more impressive is the\u00a0refinancing index’s two-week move, up 55% (though obviously off a very low ‘low’).\u00a0<\/p>\n

<\/a><\/p>\n

MBA mortgage applications to purchase a home increased by 2.8% in the same week, the largest advance since the first week of June.\u00a0<\/p>\n

Freddie Mac data shows\u00a0the 30-year fixed mortgage rate has dropped to around 6.47%, the lowest since May 2023. While this is a far cry from\u00a0the October 2023 high of 7.79%, it remains well above Covid levels of 2.68%.\u00a0<\/p>\n

<\/a><\/p>\n

Despite the decline in\u00a0mortgage rates, new costs of homeownership are dramatically higher than the average current mortgage cost. Until that gap closes (more), the housing market will remain drastically out of reach for most Americans in search of their dream.<\/p>\n

<\/a><\/p>\n

Mortgage rates track US government bonds relatively closely, and the yield on the 10-year Treasury note has fallen sub 4% on increasing recession odds amid the consumer downturn fears<\/a>.\u00a0<\/p>\n

Although weaker consumer trends remain a major near-term headwind, Goldman forecasts three 25bps Fed rate cuts this year and four in 2025.<\/strong>\u00a0With the cut cycle imminent, the refinancing index and mortgage applications will likely have further room to run.\u00a0<\/p>\n

Here\u2019s the latest snapshot as of Wednesday, showing what traders expect the Fed\u2019s move to be. Four 25bps cuts by the end of the year…\u00a0<\/p>\n

<\/a><\/p>\n

“We’ve experienced several head fakes<\/strong>\u00a0regarding potential rate cuts during the Fed’s hiking cycle,\u00a0as reflected in interest rate swaps over the last few years.\u00a0But this time, it seems more concrete as recession risks build<\/strong>,”\u00a0said Lewis Sogge, a senior loan officer at Freedom Mortgage Corporation.\u00a0<\/p>\n

Congratulations to all the millennial lenders<\/strong> who managed to weather the Fed’s interest rate hiking storm\u2014you might have made it to the other side. What does this all mean? Simply put, your industry is highly cyclical.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 08\/14\/2024 – 15:25<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/mortgage-refi-activity-jump-most-2020-lenders-see-gloom-ending<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Mortgage Refi Activity Jump Most Since 2020 As Lenders See Gloom Ending\u00a0\u00a0 Mortgage lenders have endured a brutal 2.5-year period of the Federal Reserve’s interest…<\/p>\n","protected":false},"author":0,"featured_media":1483638,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1483637","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1483637","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1483637"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1483637\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1483638"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1483637"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1483637"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1483637"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}