When mortgage rates go up, home refinancings dry up.
That’s the conclusion of a new study from Informa Research Services, but homeowners shouldn’t give up on trying to find a good enough rate to justify refinancing. Low rates are out there, you just need to know where to look.
According to Informa data, the number of American homeowners who applied to refinance their mortgages fell by 21.6% in the last week of November. While Thanksgiving week is notoriously slow for home purchases and refinancing deals, Informa points out that it was the third weekly decline in a row, and the 21.6% drop signifies the lowest level for refinancings since June 2010.
The reason people are backing off of refinancing isn’t exactly a state secret. Mortgage rates are on the rise after hovering at historic lows, mostly because of the perception that the economy is on the mend. According to the BankingMyWay Weekly Mortgage Rate Tracker, the average APR on a 30-year fixed-rate mortgage has climbed to 4.832%, a three-month high.
Rates had hovered around 4.75% for a few week now, but it was only last September that a homeowner could get a refinancing deal with a 4.25% interest rate (given a good credit rating of above 700).
So how do you go about getting a good rate on a refinance deal today?
A quick check of the BankingMyWay Mortgage Rate Search Engine, using the Bucks County, PA area code, shows four banks and lenders in that area offering mortgage rates at a base rate of 4.5% or better.
But you’d better get the process started sooner rather than later. With bond market yields rising as more investors pour cash into the stock market ahead of forecasts that 2011 will be a better year economically, look for mortgage rates to keep climbing.
When it comes to getting a good refinancing deal, it seems that the future really is now.