Mini refinancing boom is a boost for lenders

Even if it doesn’t last, surge of refinancings could help banks like Wells Fargo & JPMorgan Chase

TRD NATIONAL /
Apr.April 04, 2019 11:30 AM
The volume of mortgage applications went up 18 percent last week from the week before (Credit: iStock)

The volume of mortgage applications went up 18 percent last week from the week before (Credit: iStock)

It’s a small piece of good news for banks in the slowing housing market.

There has been a mini surge in mortgage and refinancing applications spurred by falling mortgage rates, the Wall Street Journal reports. The volume of mortgage applications went up 18 percent last week from the week before, while refinancing applications rose 39 percent, reaching their highest level since November, 2016. The Journal also found that purchase applications had risen 4 percent.

This may be the result of lower mortgage rates. Last week Freddie Mac reported rates were down to 4.06 percent, the lowest since January 2018.

While higher rates are traditionally seen as beneficial to banks, allowing them to charge more for loans, they can also slow home sales and mortgage refinancing. Profitability dropped 19 percent on average between 2017 and 2018 for top 24 banks that reported their mortgage-banking results, the Journal found.

The mini-surge in refinancing, even if it is only short-lived, will be a boost for banks like Wells Fargo and JPMorgan Chase that are big mortgage lenders.

Rates would need to continue falling to keep the current refinance boom going through another quarter, Jack Micenko, an analyst at Susquehanna International Group LLP, told the Journal. [WSJ] — Decca Muldowney

 

Related Articles

arrow_forward_ios
Brokerage firms are strategizing ways to make up losses after the cost of application fees was capped at $20. (Credit: iStock)

Brokerages on rental application fee cap: “It hurts”

Alex Rodriguez (Photos by Guerin Blask)

A-Rod is coming for NYC and SoFla real estate

There will be 70 agents based at the new office (Credit: iStock)

Compass opens Long Island City office as new-development sales surge

The Daily Digest - Tuesday

New life for Toys “R” Us, Masa Son is “embarrassed” with the Vision Fund: Daily digest

Nooklyn CEO Harley Courts (Credit: iStock)

Brokerage slashes agent commissions, delays payments after rent law change

The number of closed sales fell by more than 14 percent year over year in the third quarter (Credit: iStock)

Low mortgage rates are killing Manhattan’s all-cash buyer

The Daily Digest - Tuesday

NYC apartment prices hit 4-year low, Pacific Park developers reveal new plans: Daily digest

LeBron wanted it and California’s governor signed it. What the college athlete compensation law means to real estate

arrow_forward_ios