The Fall of Mortgage Demand in 2014

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Peter Miller, RealtyTrac contributor has recently explained why the demand for mortgage is falling this 2014.

The author explained that the housing market is actually better this time of the year thanks to the rising of home values, increase in new constructions, and the decrease in the number of foreclosures due to newly acquired mortgages that has allowed people to finance and refinance their homes.

He negated the Huffington Post who not only said the higher interest rates have murdered mortgage refinancing but also said that the average interest rate for a 30-year fixed-rate mortgage has not jumped to 4.5 percent from 3.3 percent in early 2013.

The author maintained that what is happening in the marketplace today is nothing but natural. He highlighted the following in his article:

  • This time, mortgage rates are so low that lenders refuse to offer such loans.
  • In spite of mortgage rates being well above mortgage bonds rates, they are still low which means even if they mature, lenders still won’t make a lot of money.
  • Few borrowers are actually overwhelmed by mortgage financing at 4.5 percent.
  • The decrease in loan activity is caused by borrowers’ refinancing to mortgage rates.

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