Rates are on their fifth straight day of declines as the holidays compel investors to short cover their investments. The 30- and 15-year fixed rate mortgages are down 6 basis points to 3.08% and 2.47% respectively.
Fewer people are attempting to secure mortgages. In October, rate locks fell 5.9% with rate/term refinances falling 23% and cash-out refinances falling 0.3%. Why the large disparity between loan types? Consumers tend to prefer cash-out to rate or term refinances when rates are on the rise and when homeowners have sufficient equity on hand; at last count, Americans had a cumulative $9 trillion in equity. Meanwhile, purchase mortgage locks continue to grow with a 0.4% increase. But, what about next year? Builders across the country are already bemoaning the lack of available and developed land. As such, sales have begun slowing down, an effect that will likely continue through the first half of 2022.