Mortgage Refinancing Surge After Fed Rate Cut
Audio version available here (1 min. 30 sec.)
If you have thought of refinancing your mortgage following the Federal Reserve interest rate cut last week, you are not alone. There has been a recent surge of refinance applications. Let’s explore why, and if you should join the movement.
Back in 2020 and 2021, the average 30-year fixed mortgage rate was quite low, going as far as below 3%. But once inflation became a huge problem in the following years, we reached a peak of just under 8% in November of 2023. Mortgage rates have steadily decreased since then, and as of this week, is down to 6.13%. The trend has continued for eight weeks now, and experts predict that rates will continue to go down, especially now that the Federal Reserve slashed interest by 0.5% last week.
This has resulted in refinancing applicants surging. Compared to last week, applications have increased by 20%. A more shocking number is how demand rose 175% higher than the same time last year. While this is in part due to demand being incredibly low in 2023, it shows that the housing market may pick up steam once again.
It may be tempting to consider refinancing your own home if your mortgage rate is closer to the 7% range. It certainly wouldn’t be a bad idea to assess the impact this move could have on your cash flow. However, it is also important to keep in mind that the current 6.13% average is likely to continue dropping as further rate cuts are implemented later in the year and into 2025.
The best way to come to a decision that would be most beneficial for you is to consult with a financial expert and tax advisor. At XQ CPA, our team of experienced professionals can provide you the right guidance so you can make informed decisions. To get started on your journey to financial stewardship, give us a call or make an appointment online at the link below.
Phone: 832-295-3353
Online Booking: https://xqcpa-bookme.acuityscheduling.com/schedule.php
Sources:
Want to pay less taxes? Read XQ CPA's official tax planning guidebook! How to Grow Your Wealth Through Tax Planning.
Comments