Mortgage rates set record all time lows yet again this week on the back of more global fears about European debt default and general anxiety over the U.S. economy as a whole. While employment is an issue for many and economic data as a whole has been negative as of late, the levels that mortgage rates are currently at present a silver lining for homeowners and to be homeowners in the United States.
Fed Released Report on State of 2010 Mortgage Market
This week also marked the release of a report by the Federal Reserve about the 2010 Mortgage Market. Findings in this report can help shed light on some of the issues that borrowers might facing today.
According to the report, there would have been 2.3 million more refinances if not for stricter underwriting guidelines and borrower home equity issues. As borrowers have borrowed more against their homes and their home values have decreased, they are left with less equity, which may put them outside of newer refinance guidelines for home equity requirements.
From the Federal Reserve Report on the Mortgage Market in 2010:
“We estimate that, in the absence of home equity problems and underwriting changes, roughly 2.3 million first-lien owner-occupant refinance loans would have been made during 2010 on top of the 4.5 million such loans that were actually originated.”
The inability to refinance is especially a problem in states that were hardest hit by foreclosures, where home prices have declined the most, the report shows.
In Arizona, California, Florida, Michigan and Nevada, 6.4 percent of borrowers with credit scores between 680 and 719 were able to refinance in 2010. In other states, 9.7 percent of borrowers within the same score range refinanced.
Mortgage Rates in the Week to Come
The upcoming week has a a few relevant economic reports that may move mortgage rates. These include the August New Home Sales report, Consumer Confidence, Durable Goods Orders, Jobless Claims, GDP and more. We will be reporting with a full economic calendar on Monday.
The Window of Opportunity is Officially Open, Don’t Let it Close On You
This week presented a unique opportunity for homeowners on the sidelines that have not already taken advantage of record low mortgage rates. As with any window of opportunity, there may be a limited time in which you can get rates at their current low levels. We can help you understand which programs fit your needs the best and help you lock in some of the lowest mortgage rates in history.