Mortgage rates hit a new low last week, with the average 30-year fixed rate hitting 2.86% for the week ending September. This is the ninth time mortgage rates have set a record low this year – and some experts believe it won’t be the last time.
But rates are not as low as borrowers might expect as overacted lenders are trying to keep mortgage rates down, slowing mortgage and refinance applications according to experts. Once lenders catch up, mortgage rates are expected to fall further.
“It’s not that they [lenders] Don’t want to drop rates. Is that they don’t yet have the ability to fulfill that mortgage request, on refis [refinance applications] Notably, “Jeff Taylor, a partner in Digital Risk, a Florida-based financial mortgage analytics company, told Yahoo Finance The Final Round.
During the coronavirus epidemic, refinancing and new mortgage applications have been a frenzy of activity. According to a new Fannie Mae forecast, lenders are projected to hit a record $ 3.9 trillion compared to 2019 this year, and new home sales are projected to grow by 14% this year.
“We are moving towards a $ 3 trillion residential mortgage market. This is the second largest share in the last 25 years, behind only 2003… interest rates have decreased so much… and I see the market warming up for the rest of this year and all the way to 2021 Running from, ”Taylor said.
According to Snapdock, a San Francisco-based digital mortgage closing company, the mortgage application process should take 30 to 45 days, but applicants have to wait 45 to 120 days on average.
“Low interest rates are increasing purchases and refinancing applications, and many are crushed by demand from lenders. Some are throttling business by keeping interest rates at a level where they can ensure that they are able to carry out the business they are doing. Due to the incredibly high demand, lenders are beginning to think that they will not be able to close new loans for six months.
Most mortgage companies have tried to bring in more employees to cope with the demand. According to the Bureau of Labor Statistics, salaries of nonbank mortgage bankers and brokers were 9% since July last year. Mr. Cooper, a Texas-based mortgage lender, is hiring 2,000 new employees, the company announced this month, with Detroit-based lender Quicken Loans hiring 4,000 new employees during the epidemic, and United Shore’s plan total. 1,500 to be hired.
“This kind of explosion in volume, you have to expand your workforce, I think. There’s really no way around it without burning all your people,” Florida-based The Mortgage Firm’s Capital Markets at Snapdeal Webinar last week And senior vice president of operations Sherry Nedley said.
Some lenders, such as mortgage firms and Wisconsin-based Waterstone Mortgage, are adding technology to increase efficiency, providing online applications, digital closing, and automated communication updates to customers. Meanwhile, digital lenders such as eOriginal and New York-based Better.com have reported explosive demand during the epidemic.
“Sometimes, the change doesn’t happen unless it’s absolutely necessary. It’s going to be a big push in digital mortgage closing.” John Moffett, director of mortgage operations at New York-based digital mortgage loaner Better.com, alone There was a 200% application increase in March.
Sarah Panter is a reporter at Yahoo Finance. Follow him on twitter @sarahapaynter
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