The mortgage market is on a tear in 2020. Despite a stumbling economy, lenders issued roughly $1 trillion in home loans last quarter.
As our chart of the week shows, refinancings are driving this boom. Although new home purchases were down from a year ago, refinances have climbed more than 200%.
Why is this happening?
Interest rates, mainly. The 30-year mortgage rate hit new lows multiple times this year. And at the time of this writing, mortgage rates have crept below 3%.
Whether this is good or bad depends on your perspective. Low rates are good when people want to buy or refinance a home, but those same low rates are also indicative of a sluggish economy.
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Indices mentioned are unmanaged, do not incur fees, and cannot be invested into directly.
Past performance does not guarantee future results.