Despite a home loan rate uptick in early June, refinance applications held steady, clocking in at only one percent lower in volume than the same time one year ago.
Loan applications to purchase a home were still 14 percent higher than the same time a year ago. A stronger-than-expected May Jobs Report released in the first week of June sent Mortgage Bond prices lower. Since home loan rates are inversely tied to Mortgage Bond market activity, rates reacted in tandem, moving slightly upward
Uncertainty overseas due to the potential default in Greece also impacted the markets last month, with investors moving their money into “safer” assets like Mortgage Bonds. This helped Mortgage Bonds and home loan rates reverse course and improve mid-June.
The Federal Reserve also met in mid-June and stated that any changes it makes to the Fed Funds Rate (the rate banks charge each other to lend money overnight) will come after cautious observation of jobs progress, inflation and general economic health.
Even with an eventful June, home loan rates remain at historic lows when compared to prior years.
Supply Remains Limited in Many Areas
Homebuyers have experienced a highly competitive market this season, with very little supply and housing inventory from which to choose. Many of the nation’s largest housing markets continue to experience too few homes available for sale, giving sellers an edge in picking the best purchase offers.
However, this advantage may be fleeting for home sellers. If home loan rates rise, prospective buyers will have less spending power. A June CNBC report suggested that if buyers can’t compete, then sellers will lose leverage.
Home loan rates remain favorable, though more market volatility is likely ahead. Should you or anyone you know have questions regarding purchase or refinance opportunities, please get in touch today!
This article was taken from my July 2015 issue of YOU Magazine. Click here to view the full newsletter.