In early January a sharp decline in interest rates, coupled with buzzing announcements to reductions on popular federally-insured home loans, resulted in both purchase and refinance volume at their highest in six years, according to a CNBC report. After rates dropped in the first full week of the year, total home loan applications almost doubled in the week following. By mid-month, purchase applications were two percent higher than the same time last year, and demand for refinances was at its highest in eight months. Big Housing Announcements The housing industry was already the talk of the town after President Barack Obama announced cuts to mortgage insurance premiums on new government-insured Federal Housing Administration (FHA) loans. The reductions will result in more affordable monthly housing payments and provide new opportunities for as many as 2 million borrowers over the next three years. The Bottom Line Continued low rates and higher demand for popular first-timer home loans may drive up housing activity. If you have any questions regarding housing or know of friends, family or colleagues who wish to discuss buying or refinancing a home, please get in touch.
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