Blog posted On April 10, 2020
Mortgage rates have experienced some volatility in recent weeks but remain historically low. Job openings dipped slightly in February and are likely to continue declining into March. Consumer borrowing picked up in February. Weekly mortgage application submissions declined.
The Job Openings and Labor Turnover Survey (JOLTS) lags by one month, so the data released this week has not yet been impacted by coronavirus-related hiring freezes and layoffs. In February, job openings fell slightly to a level of 6.9 million. This figure is expected to fall more substantially in March. Hiring was virtually unchanged at a rate of 5.9 million and voluntary quits stood at 5.56 million.
The consumer credit report, also lagging by one month, showed borrowing accelerated in February ahead of the coronavirus slowdown. Revolving credit increased by 4.6% and nonrevolving credit increased by 7% for a composite annual growth rate of 6.4%. Consumer borrowing is likely to increase substantially as laid off workers use credit cards and loans to cover expenses during their loss of income.
Both new purchase and refinance mortgage application submissions declined for the week ending 4/3, for a composite decrease of 17.9%. New purchase mortgage application submissions slipped 12.0% and refinance mortgage application submissions are down 19.0%.
As many industries adjust to new practices and procedures to accommodate state and federal social distancing guidelines, mortgage lenders are still fully operational. Many homeowners may choose to refinance to lower their monthly mortgage payment and get some financial relief during this period of uncertainty. If you have any questions about refinancing, please let us know.