Homebuyers are rushing to take advantage of lower mortgage rates following the Federal Reserve’s recent interest rate cut, according to a Washington Post article. I was surprised at the number of refinancing applications being made now that rates are in the high 5% to low 6% range.
This indicates that many people still have higher rates, and there are more of them than expected. While several are likely those who purchased homes in the past couple of years when rates were high, the numbers suggest there are many more who must have had higher rates for longer.
We’ve generally assumed that most homeowners have extremely low mortgage rates, but this article states that only 3 out of 5 are below 4% – a lower proportion than I would’ve thought. The article also suggests that the market has already picked up significantly with these rate changes. We haven’t felt the impact yet in the Twin Cities, but conventional wisdom suggests these trends typically start on the coasts and move toward the middle of the country. In response, we’ll be clearing our calendars in anticipation of increased calls requesting construction loans!
