Strike While the Iron is Hot

By Dave McKean

Friday, February 15, 2019

Drop in Mortgage Rates After Holidays Increases Applications

When it comes to mortgage applications, striking while the iron is hot is important. It seems many homeowners and homebuyers feel the iron is particularly scorching right now. Thanks to a combination of a slow end to the year and a drop in mortgage rates, mortgage applications have skyrocketed to start 2019. 

As reported by the Mortgage Bankers Association, there was a 23.5 percent increase in overall volume from the last week of 2018 to the first week in 2019 -- although the total volume of applications was still 9 percent lower than it was a year earlier. Refinancing applications experienced a boom, thanks to a significant drop in interest rates. With rates at their lowest since April 2018, refinancing applications rose by 35 percent. Just like mortgage applications, however, the volume of refinancing applications overall is still lower than the same point as last year. 

Mortgage applications for home buying jumped by 17 percent over this period, and the overall volume was 4 percent higher than in January 2018. After a slow holiday season, it seems that people across the country are ready to buy a new home, but there are some issues that may prevent closing for many of these recent applications. 

For one, the stock market has been particularly volatile in recent months, which has the possibility of impacting mortgage interest rates. In addition, the ongoing government shutdown may pose problems for prospective homebuyers. According to a survey by the National Association of Realtors, the shutdown is causing issues for some Realtors in closing home sales as they see government workers backing out of purchase offers and loans being denied because of loss of income. 

Some experts worry that the drop in interest rates may be an indicator of a larger market correction to come. Such a correction would certainly be beneficial to those who invest in the stock market but would not be as advantageous for those who wish mortgage rates to stay low. 
Did You Know?
"The Ides of March" refers to the center of the month, or rather, March 15th. The phrase is most famously used in Shakespeare's tragedy Julius Caesar, in which a seer warns Caesar to "Beware the Ides of March", ultimately alluding to his assassination on March 15th. Funnily enough, the location of Caesar's death is now a protected no-kill cat sanctuary in Rome.
Eric T. Mitchell 
License: NMLS 282876
Executive Vice President
Gold Star Mortgage
Phone: 310-356-7388 x729
Fax: 888-696-1344

Categories: Mortgage Related News