Purchases out pace refinances, first time since December
More people sought mortgages in order to purchase a home during the month of April 2015 than did those who were looking to refinance according Ellie Mae — a mortgage processing company. This is the first month since December 2014 that purchases outpaced refinances.
Approximately 52 percent of mortgages were for purchases in April as opposed to the 47 percent that were for refinances.
Purchase originations should continue to outpace refinance applications as low interest rates tick up over the course of 2015. This is because the financial reasons that lead households to purchase a new home are different than the reasons households might seek to refinance.
Fed Chair Janet Yellen again corroborated on 5/22/15 that it will be “appropriate” for the Fed to raise interest rates later this year. This one of the primary reasons purchase originations should continue to outpace refinances for the rest of 2015 as a healthier economy and stronger labor market should offset potential homebuyer concern that mortgage rates will go up in the future.
Potential homebuyers or people currently looking to refinance will find current mortgage rates near all-time lows as conforming no point 30-year mortgage rates average 3.875 percent while 15-year rates average 3.125 percent.
For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.