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Mortgage Home Refinance Rates

An overview about mortgage home refinance interest rates

As of this writing (September 2014), mortgage interest rates are continuing to drop, with the average rate of a fixed-rate, 30-year mortgage at 4.15% as of September 3. This is the lowest level this year, nearly half a point lower than at the beginning of the year. This isn't a huge drop, though, and realistically, although it will save people who are looking to buy or to refinance their mortgages a bit of money, it will not likely have that much of an impact in home buying or on refinancing.

What Caused the Rate Drop?

Economic growth appears to be solid in the United States, but unrest worldwide, particularly in the Russia and the Ukraine, have resulted in investors doing what they typically do in times of global strife - look to US Treasuries for stability and safety. That influences home mortgage refinance rates, so typically, the worse things are in other countries, the better off the mortgage shopper is going to be at home and so will be refinance home mortgage interest rates.

After a fall to record lows in the latter part of 2012, home mortgage refinance rates have been reasonably stable. The highest point occurred in the middle of 2013, when home mortgage refinance rates went up to nearly 5%. However, they've remained fairly flat throughout 2014, until they began to slip in the late spring.

What Does this Mean for Refinancing?

When mortgage interest rates decline, it only makes sense that people will be more interested in buying or refinancing homes. Although the recent slight drop in mortgage interest rates hasn't been enough to dramatically increase refinancing, it's worth noting that applications for refinancing have increased, owing to low home mortgage refinance rates, while buying applications have declined. During the first week of September, refinancing accounted for 57% of all mortgage applications - that's the highest since March.

What Does the Future Hold?

The decline in the home mortgage refinance rates has occurred at a critical point for the housing recovery. Last year, there was a good deal of momentum, with investors buying bank-owned listings as soon as they became available. Today, however, mortgage delinquencies are on the decline, so deep discounts are harder to find, and investors have been replaced by traditional home buyers.

As to what will happen to rates as the year draws to a close, the conventional wisdom seems to be that the best possible advice is simply "stay tuned." If the economy should happen to falter, or if matters overseas should happen to escalate, refinance home mortgage interest rates could possibly go even lower than they are right now. All eyes are on the world stage, waiting to see what happens in Russia and the Ukraine, and of course in the perpetually troubled Middle East.

In the meantime, low refinance home mortgage interest rates do make it attractive for anyone who is thinking of refinancing their mortgage, but it's possible that people are also feeling cautiously optimistic that refinance home mortgage interest rates may fall even more. There doesn't seem to be a huge rush to refinance.