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Numbers Count: Weekly mortgage data highlights

Wendy Cutrufelli
Mortgage Banking

Numbers count. They matter to bankers and to prospective homebuyers, sellers, and real estate professionals. Here’s my take on the key numbers on the housing market this week.

The numbers: Can you say ‘refi’?

view of roofline on multifamily home with tan siding and blue sky in background.As interest rates slid lower again last week, the refinance share of mortgage activity increased from 55% the prior week to 56% of total applications, the highest level since March, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Aug. 22. The average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.28% from 4.29% the prior week, the MBA said.

What counts: Mortgage rates are down from last January and December when the average rate was around 4.45%. Whenever rates move significantly lower, I encourage customers and friends to look at their financial situation to see if a mortgage refinance might help them. As a general rule, if rates are 50 basis points (or 0.50%) lower than the rate you are paying on your mortgage, you may be able to save money by refinancing.

A refi might benefit you if you are looking to lower your monthly payment, or seeking to take cash out from equity that you’ve accumulated in your property. Also, if you have an adjustable rate mortgage and are concerned that rates may rise in the future, the lower rates now may provide an opportunity to refi into a fixed-rate mortgage that will provide payment stability for the life of the mortgage.

The numbers: Underwater ranks declining

The percent of mortgage holders with negative equity in their homes fell to 17% in the second quarter, down from almost 19% in the first quarter and down from a peak of 31% in the first quarter of 2012, according to the second quarter Zillow Negative Equity Report. Negative equity has fallen for nine consecutive quarters as home values have risen.

What counts: Less negative equity should be good for the housing market overall and good for individual homeowners. Homeowners with negative equity can have a difficult time selling their home since they owe more than their home is worth, so they would likely be selling at a loss.

As more owners have positive equity, more of them may put their homes on the market, which could help the inventory situation. Also, some of those homeowners who now have positive equity positions in their homes may be able to take advantage of the current low rates to refinance. The rise in home values may put you in a stronger equity position than you realize.

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