The sound and fury of the financial markets continue to warn of an impending recession, however, the silver lining is mortgage demand reached a three-year high this week. The decline in mortgage rates over the last month is causing a spike in refinancing activity – as homeowners currently have $2 trillion in conventional mortgage loans that are in the money – which will help support consumer balance sheets and increase household cash flow. On top of that, purchase demand is up seven percent from a year ago.
We’re seeing a tug of war happen as the fixed income market flashes warning signs while the equities market continues to march higher with optimism. The data suggests the economy is weakening but is still on very solid ground with high consumer confidence and a strong labor market. Closer to home, the housing market continues to slowly improve and gain momentum as we head into the second half of the year, which is good news and should keep the economy growing.
The economy continued to show strong business activity and growth in employment which drove the 30-year fixed mortgage rate to a seven year high of 4.94 percent on national average– WE are still at 4.75%
Higher mortgage rates have led to a slowdown in national home price growth, and the price deceleration has been primarily concentrated in affluent coastal markets in California.If you are in an adjustable rate mortgage Lock in a fixed rate now.!