Home : Blogs : John Gay : John's Blog

Mini Refi Boom?

Many believe that the FED will cut rates by as much as .50% next week. If these cuts materialize over the coming months look for refinance volume to begin to pick up as 30 yr fixed rates will once again slip below 6% which should spark a nice refinance rally before the end of the year.

Unfortunately the same cannot be said about the home sales market as many potential buyers are being shut out of the game due to tighter credit guidelines and those who can buy are sitting on the fence to see how low home prices will fall.

While refinances should begin to pick up assuming the FED does act the housing sector will take a bit longer to recover and will most likely need to see 30 year fixed rates below 5.50% before any meaningful recovery begins to develop.

Posted by John Gay on 09/14/2007 08:25 AM

Comments (4)

mortgage, rates, refinance

4 Comments on Mini Refi Boom?

SEP

2007

I don't think they will cut as much (gut not science), but I do see the Fed continuing a strategy to eep raes low as ARM's adjust. The problem that I see is the rash of 100% financiung that occurrred over the past couple of years. This ocmbined with the cooling of the housing market is what is keeping lenders from refinacning many of these loans.

As far as credit guidelines, ity is like learning the mortgaeg game all over again. Ouch.

Good post.

John, I suspect that if rates go down, it will become easier for many homeowners to refi out of their adjustable rates. This should reduce the number of foreclosures, which in turn will reduce the number of properties on the market.

Fewer homes on the market will reduce the softness in housing prices, and start us back on the road to a more normal housing market.

Don't see jumbos going this low, and think that rates will go down .25, not .50. My guess.

I like Brian's perspective. I'm concerned that appraisals won't come in due to "declining market" which will make refinancing harder. It like putting together a jigsaw puzzle.

Leave a response…

Name:

Email:
(optional)

Comment:

What does the graphic say?