New homeowners who “married the house but dated the rate” are tired of dating, and a surge of refinancing is expected if rates drop a full 1%.
NEW YORK – Today’s buyers may love their home but hate their mortgage. However, for the foreseeable future, rates may very well stay higher than the 3% to 4% loans that made home buying more affordable through much of 2020 to 2022, notes Doug Duncan, chief economist at mortgage agency Fannie Mae.
But rates may dip enough to make it advantageous for recent buyers to refinance that 6-7% rate, says Duncan. He predicts just a 1% drop from owners’ current rate “will trigger significant refinancing.” Moreover, once the Federal Reserve inflation is under control, rates could likely settle in the 4.5% to 6% range.
To entice homebuyers to borrow from them, some lending firms have begun advertising “no cost” refinance later on.
