Mortgage rates are still a concern, but LOs are gearing up for the busy days ahead

The recent declines in mortgage rates have been good news for mortgage professionals and consumers alike. But the industry isn’t out of the woods yet, says Todd Sheinin, the Maryland-based vice president of strategy and development at Primary Home Mortgage Inc.

“As you talk to more people in all aspects of our business, from loan officers to consumers and real estate agents, everyone is eagerly awaiting what’s to come,” Sheinin said.

For a conventional 30-year mortgage, most Sheinin customers are in the mid-6% range and customers purchase points depending on their down payment and credit score.

August is generally a slower time for business in the mortgage industry and this year is no different, according to LOs HousingWire. But with mortgage rates falling to the mid-6% range – and more declines expected to come – originators are bracing for busier days ahead.

“There may be a small increase in requests and people are watching a lot. I don’t think this is quite what you’re looking for yet in terms of increased activity,” Sheinin said.

The average 30-year conforming mortgage rate fell to 6.66% HousingWire‘s Mortgage Rates Center on Wednesday reported inflation data that showed the U.S. economy has cooled and pushed down 10-year Treasury yields.

After mortgage rates spiked above 7.5% in May, some LOs are finding small refinancing options.

“Overall, it’s just easier to do refinances right now, and easier to call up our previous customers who are coming out of the high 7% mortgages and get them lower, but I haven’t seen a huge rebound in the buyers market,” said Benjamin Segaloff, a Michigan-based executive loan officer at Rocket mortgage.

Jared Evenson, branch manager for CrossCountry Mortgage in Spokane, Washington, is calling all of its former clients to explore refi options.

“As lenders, we sometimes assume that refinancing may not make sense for them, so we may not make that call because it’s going to be another quarter of a percent until it’s their time, or another half of a percent to where it will really make sense. for that,” Evenson said.

Through a phone call, Evenson learned that one of his clients wanted to refinance his existing 30-year mortgage into a 15-year loan. This brought up the timeline to refinance faster, as rates are lower on a 15-year mortgage.

“That completely changed my strategy for him,” Evenson said. “Like his [existing] The mortgage rate was 6.625% and the loan amount he has around $650,000, we start to see an opportunity at around 6% [for a 30-year mortgage] for him. If I see a 30-year rate at 6%, his 15-year rate could be 5.5%, so it might be time to pull the trigger sooner rather than later.”

Mortgage rates, which generally keep pace with ten-year government bond yields, are expected to fall further in the coming months as the Federal Reserve Rates are widely expected to be cut by 25 to 50 basis points in September.

“If we get below 6%, I think the refinancing opportunities are going to explode because we’re going to be able to streamline every FHA loan, and every loan that we’ve made in the last two years, we’re going to be able to refinance,” Segaloff said.

The general consensus among LOs on the magic speed to stimulate activity is in the 5% range.

“I think the real key is that rates continue to fall, and once we get to somewhere where there’s a five-handed lead, even a 5.875%, we’ll really start to see activity there,” Sheinin said.

“You’re going to unlock a whole bunch of sellers as rates drop into the 5s because as rates get closer to their current rate it’s not hard to go from 4.25% to 5.25%,” Evenson added .