Number of homeowners who could benefit from refinancing tops 8 million
Are you one of them? If so, let’s get a move on!
Home loan experts have been strongly urging homeowners to consider refinancing over the past few years but now that interest rates have unexpectedly dropped, they’re really turning the volume up. A nearly perfect storm of ideal financial conditions has pushed the number of homeowners who could benefit from refinancing over the eight million mark according to Black Knight.
Let’s start with the most exciting news - interest rates have dropped to their lowest level in three years. Ever since the beginning of 2019, financial markets have improved but in the background many experts were signaling a cautionary tone with respect to global economic growth. Enter President Trump who unexpectedly ratcheted up trade tensions between the United States and China, causing investors to put more money into the relative safe haven of the bond market. The end result? Bond yields have fallen as well as home loan rates which in turn has boosted the number of homeowners who could save money by refinancing.
Second, property values remain solid even though the housing market has cooled in some parts of the country. According to the S&P Case Shiller Index Report, home prices increased an average of 3.5% in June 2019 while the 20-city composite index posted a healthy 2.5% year-over-year increase. As a result, more and more homeowners now have the necessary home equity to refinance.
Third, the Federal Reserve has modified its stance on interest rate policy which has provided additional reassurance to the markets. At the beginning of 2019, Federal Reserve Chairman Jerome Powell was practically telegraphing the Fed’s intention to raise interest rates as many as three times in 2019. However, as concerns about global economic growth intensified this spring, there were calls by President Trump and others to actually cut interest rates in June. While the Fed has thus far refrained from cutting interest rates, they appear to be taking a wait-and-see approach which has served to calm the financial markets - notwithstanding a possible trade war with China.
Back in Americana, many homeowners have seemingly been oblivious to the fact that home loan rates have dropped and that they can refinance and save some real money. According to Housing Wire, there are nearly 4.5 times the refinance candidates that there were when interest rates peaked in November 2018, and many of them could drop their interest rates an average of 0.75% - which would generate an average savings of $266 per month.
Who among us couldn’t use an extra $266 per month? That’s over $3,000 per year! Don’t be caught snoozing - with interest rates dropping and property values rising in most parts of the country, now is a great time to lower your interest rates or even apply for a cash back refinance, especially if you’d like to use some of your equity to pay for home renovations or to consolidate high interest debts such as credit cards. The key takeaway is to do something now before the perfect storm is over.
- Nutter’s Home Refinancing Guide
- Explore Your Refinance Options
- No Closing Cost Refinancing
- Today’s mortgage rates
- Fixed Rates vs Adjustable Rates
- Refinance Calculator
- Blog: Using a Mortgage Refinance Calculator Can Help You Save a Fortune
- Blog: Cash Back Refinancing 101
- Blog: The Riskiness of Home Equity Line of Credit Loans
- Blog: Time to Refinance and Boost Your Monthly Cash Flow
- Blog: How to Refinance and Get Extra Cash
- Blog: U.S. - China Trade War Causing Home Loan Rates to Drop
- Blog: Home Renovations Take Off