Mortgage lenders want you to know that they think today's mortgage rates may be the lowest we'll ever see in our lifetime. That's the word from the Mortgage Bankers Association, whose members met in Atlanta for their annual convention.
The economic forecast released by the MBA's chief economist suggests that mortgage rates have hit bottom, with the potential to rise by as much as one full percentage point by the close of 2011.
Conference attendees remarked that today's mortgage rates have already spurred significant amounts of refinance activity. At some mortgage lenders, refinancing represents as many as four out of five active deals.
However, the group's economists warned, a major wave of refinancing now could prevent many homeowners from seeking mortgage loans for decades. After locking in historically low rates on deflated real estate prices, many consumers may choose to avoid cash-out refinancing in favor of holding on to their highly affordable deals.
Mortgage lending on the upswing?
On the other hand, MBA economists expressed optimism that real estate prices may actually rise faster than mortgage rates. Higher appraisals would qualify millions more American homeowners for refinancing deals, potentially restoring mortgage volume to 2009 levels.
Association members have already remarked that industry consolidation and hiring trends have helped mortgage lenders hit staffing levels appropriate to this year's deal volume.
Banking leaders still hurting from rounds of layoffs may be reluctant to add new staff to handle increased requests for mortgage quotes through the new year. Refinancing deals could take longer to process if loan officers have to juggle too many customers at once.
Based on mortgage lenders' remarks at the conference, the fourth quarter of 2010 and the first quarter of 2011 may be the sweet spot for homeowners who aren't underwater on existing mortgages. Mortgage lenders have the inclination, the funding, and the staffing levels to get deals done efficiently, even in the run up to the holiday season.
Take advantage of today's low rates
Consumers who take the time to shop rates online can connect with lenders and take advantage of these historically low rates. Waiting much longer to lock your rate could mean you miss the dip that's driving long term savings for hundreds of thousands of American households.