Yesterday, the Mortgage Bankers Association said last week's refinancing applications were up 92 percent and purchase applications were up 7 percent since early November, when 30-year interest rates were about 6.35 percent.
At Worthington Overlook Mortgage Consultants in Adamstown, Frederick County, the calls have started rolling in, and President David Pulford Jr. expects them to multiply.
"They're going to get a lot more harried as the [rate] news gets out," said Pulford, who's reluctant to assess what this could mean for business or even customers.
While some said lowering interest rates could lead to more discretionary spending and boost the economy, Pulford pointed out that it takes time to realize any savings - about 30 days to approve a refinancing and another 30 days before your new payment would be due.
"It's only part of the economic stimulation that we need," he said.
The weak economy is driving the lower rates. It pushes risk-averse investors toward Treasury bonds, nudging their prices up and yields down. That means mortgage rates, which are tied to the bond yields and typically run about 2 percentage points higher, will also be down. (Though by yesterday afternoon, a rebound in the stock market helped keep mortgage rates from sinking further).
The low rates and reportedly high call volume made some more optimistic than Pulford.
"The feeling is right now that this is going to stimulate and turn the market around. We're going to start to see some action again," said Thomas Shaner, executive director of the Maryland Association of Mortgage Brokers. "For the brokerage professional, this is an opportunity to get their business back in line."
That's how the Shipowicks see things.
They opened their small mortgage business in January 2000 and have thus far weathered the market downturn fairly well. They were able to move into new offices last year, but they're still not where they'd like to be.
"The last year and a half have not been really good in our industry," David Shipowick said. "We're ready, we're more than ready" for a turnaround.
The sentiment was echoed by others in the industry, but Jay Brinkmann, vice president of research and economics at the national Mortgage Bankers Association, was cautious.
"We can expect to see the economy get slower before it gets better," he said. "While this is a step toward the economy getting better, it's going to be a while. I don't think we hit bottom yet."
tricia.bishop@baltsun.com
Refinancing needs
With mortgage rates falling, many consumers are considering refinancing their loans. But the requirements are different in this post-credit crunch. Some things you'll need:
Good credit, with a minimum score in the mid-600s
No late payments on credit cards, mortgages or installment plans in the past two to three years
Home equity
Proof of income
