“Refinance business depends on how low rates are,” Charles Richardson, a mortgage professional
with Fembi Mortgage, told Mortgage Professional America. “Refi business can be cyclical – as long as rates stay down, refi business will continue to be strong.”
Still, even with rates low, refi business fell week-over week.
The refinance share of business fell to 56.9% of total applications for the week ending September 4 – a drop from the previous week’s mark of 58.7%, according to the Mortgage Bankers Association’s weekly mortgage applications survey.
Originators will have a better sense of how they can expect refinance business to perform once the Federal Reserve makes its next rate decision. That meeting will be held on September 16-17.
Many are calling for the Fed to maintain its benchmark rate, including World Bank Chief Economist Kaushik Basu.
“The world economy is looking so troubled that if the US goes in for a very quick move in the middle of this I feel it is going to affect countries quite badly,” he told
the Financial Times.
MBA’s refinance index fell 10%.
As for mortgage loan applications, they decreased 6.2% over the previous week.
That business drop aligns with slight interest rate changes.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances fell to 4.03% from 4.05% week-over-week.
Meanwhile, the average rate for 30-year fixed conforming loans increased to 4.10% from 4.08%.
Originators have enjoyed strong refinance business over the past few months, and that trend is set to continue – despite recent data pointing to declines in those applications.