Mortgage rate hikes don't appear to be slowing down. According to financial services company Intercontinental Exchange’s (ICE) July 2024 Mortgage Monitor Report, there has been a significant shift to higher average rates. As of May 2024, 24% of homeowners have mortgage rates of 5% or higher, compared with two years ago when nine out of 10 had rates below 5%. Additionally, since 2022, 4 million first lien mortgages have 30-year rates above 6.5%, with 1.9 million exceeding 7%. Moving forward, Andy Walden, ICE’s VP of research and analysis, says this figure will be something to watch.
“The concentration of active loans just below 7% has more to do with borrower psychology than concrete savings. There’s clearly something appealing in today’s market for a homeowner to see a 6-handle in front of their mortgage rate. From a rate/term refinance lending perspective, this group is worth watching as they represent a potential tipping point for a return to more meaningful, albeit historically modest, refi volumes.”
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