Mortgage rates recently skyrocketed to their two-year highs, causing mortgage demand to decrease significantly for homeowners looking to refinance, as well as playing a role with potential homebuyers looking to purchase a home. Due to the recent unrest in Ukraine, we have seen interest rates drop a good amount over the most recent week. Investors are quickly moving their money into the bond market, which results in lower yields and dropping interest rates.
While it is still widely expected that interest rates will continue to rise throughout 2022, analysts are expecting that rates will drop a bit if the war in Ukraine continues. Applications to refinance a home increased 1% last week, but still remain 56% lower than the same week one year ago. Mortgage applications to purchase a home, fell 2% for the week, and were 9% lower year-over-year. This recent drop from two-year highs, has possibly opened the door for the remaining homeowners who have yet to capitalize on lower interest rates, to refinance their homes. In addition, as we head into the Spring housing market, it will allow for new homeowners to capitalize on lower rates than they may have expected.