Wall Street Journal writers Orla McCaffrey, Julia Carpenter and Ben Eisen reported last month that, “Record low mortgage rates are delivering more refinancing demand than some lenders can handle.
“Homeowners are rushing to refinance their mortgages thanks to big falls in interest rates prompted by fears of the spreading coronavirus. Some lenders are having trouble keeping up with the red-hot demand.
“Weekly refinancing applications recently hit their highest level in nearly 11 years, according to the Mortgage Bankers Association. The average rate on a 30-year fixed-rate mortgage, the most popular home loan in the U.S., is close to its lowest level in nearly 50 years of record-keeping, hitting 3.36% [the week of March 9th].”
The Journal article added that, “Falling rates are generally considered good news for the mortgage market. But the current jump in refinancing demand presents a dilemma for some lenders, which must balance their desire for volume with their capacity to process applications.
“Lenders are wary of expanding too quickly in the boom-and-bust mortgage market. What’s more, the coronavirus pandemic—though it helped send mortgage rates down—could hobble home sales during the important spring selling season. Some would-be sellers are already reluctant to stage open houses, and potential buyers could shy away because they are unsure about their jobs.”
