Mortgage Rates Go Down; Refinancing Goes Up
RENEE MONTAGNE, host:
Meanwhile, mortgage rates for 30-year fixed loans have fallen to 5.29 percent. That's created a mortgage boomlet. NPR's Yuki Noguchi has more.
YUKI NOGUCHI: This holiday shopping season, the hot item is mortgage rates.
Mr. KEITH GUMBINGER (Vice President, HSH Associates): We reckon that to be approaching 50-year lows for conforming 30-year fixed rate mortgage money.
NOGUCHI: So says Keith Gumbinger. He's vice president of HSH Associates, a mortgage analytics company. He says refinancing applications tripled the week of Thanksgiving.
Mr. GUMBINGER: The industry is frankly unprepared for it.
NOGUCHI: After all, mortgage-related employment has dropped by nearly a third since its peak in 2006. So some companies, including Bank of America, have shifted their workforce to help with the crush. Others have hired back some workers part-time, but not everyone will be locking in at these lower rates.
Mr. GUMBINGER: For certain audiences, this is a historic kind of opportunity. For others, they simply shrug their shoulders and turn away.
NOGUCHI: Those who are turning away include people whose homes are worth less than their loan amounts; They can't refinance. Also the rate on jumbo loans, which are loans over $417,000, remains over six percent. Another group is also absent so far from this recent boom, home buyers. But that could change, says Orawin Velz, vice president of economic forecasting for the Mortgage Bankers Association.
Ms. ORAWIN VELZ (Vice President of Economic Forecasting, Mortgage Bankers Association): You have home prices declining, and you have mortgage rates that are declining as well. So there will be some people that could see very attractive affordability.
NOGUCHI: But don't look for an uptake in home sales to start happening, she says, until after the after-Christmas sales. Yuki Noguchi, NPR News.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.