In the wake of a political deal to solve the nation's debt ceiling crisis, the yield on the benchmark 10-year Treasury fell to 2.7% Monday, which usually means mortgage rates are headed south as well.
For most of last week the 10-year hovered between 2.85% and 3%.
But even if mortgage rates continue their descent, will it translate into more refinancings – and just how many more mortgagors that haven't already refinanced will pull the lever? Jay Brinkmann, chief economist for the Mortgage Bankers Association, isn't so sure. He noted that refi applications have not been terrific of late and is unsure whether the latest drop in rates will spur much new business.
One area where MBA is noticing activity is for refis on mortgages that are close to the Fannie Mae/Freddie Mac limit of $729,750. Unless Congress extends the ceiling, the cap will fall to $625,500 come October 1.
Consumers who want to refi their high balance loans need to apply soon to make sure the mortgage closes before midnight September 30.
