Real Estate News And Analytics A Great Time for Refinancing a Rental Property by Sylvia Shalhout February 13, 2020February 13, 2020 Sylvia Shalhout February 13, 2020February 13, 2020 Mortgage refinances were up last week as property owners are hoping to take advantage of low rates. Right now could be a great time for refinancing a rental property in 2020. Activity in the US Mortgage Market Is Up The Mortgage Bankers Association (MBA) reported that the volume of total mortgage applications was up by 1% week-over-week. The bulk of the increase came from mortgage refinance applications which saw an increase of 5% from the previous week. Compared to the same week in 2019, property refinances are up an impressive 207%. As the Federal Reserve continued to cut interest rates in 2019, mortgage rates followed suit and began to drop. Low mortgage rates continued into 2020. Experts say this is in part due to fear from the spreading coronavirus and its possible effect on financial markets. Fed Chairman Powell cited the coronavirus as a reason for keeping the Fed interest rate steady at the end of January 2020. Mortgage rates were close to a 3-year low, which is driving homeowners into the refinance market as well as those looking to refinance a rental property. However, rates stopped falling last week and actually saw a rise of one basis point. The average rate for a 30-year fixed-rate mortgage with conforming loan balances of less than $510,400 rose to 3.72%. Points for mortgages with a 20% down payment hold steady at 0.28. Joel Kan, an MBA economist, commented that even with the rise, rates are still close to the 3-year low, encouraging mortgage activity: The mortgage market continues to be active in early 2020, as applications increased for the third straight week. Rates also rose, but still remained close to their lowest levels since October 2016. This rise will likely drive even more demand for mortgage refinances as property owners may start to fear the possibility of higher mortgage rates as we move throughout 2020 and worries over the coronavirus’ impact subsides. Chief Operating Officer at Mortgage Daily News, Matthew Graham, commented on the connection between rates and the virus: Given that Chinese equities markets are already indicating the financial market psyche has shifted, it may only be a matter of time before US bond markets (which dictate mortgage rates) follow suit. If we assume that bond yields (aka rates) are only as low as they are because of coronavirus, any additional recovery in Chinese equities would likely coincide with upward pressure for interest rates. Although the mortgage rate forecast for 2020 is unclear at the moment, it’s best to make a move now if you are a real estate investor considering refinancing a rental property. Locking in lower investment property mortgage rates now could increase your rental property cash flow. Related: Is It Worth It to Refinance Rental Property? And if you were hoping to refinance investment property to buy another, you may not find as much competition in the real estate market as we were seeing earlier in 2020. Mortgage applications to purchase property actually dropped 6% last week even with low mortgage rates. Although this is still 16% higher than the same time last year, low housing inventory and continuing price acceleration have pushed some buyers out of the housing market. If you are in the market for a new investment property after you refinance your rental property, start your search with Mashvisor. Sign up now to Mashvisor to stay updated on real estate news around the US. Start Your Investment Property Search! START FREE TRIAL Mortgage 0 FacebookTwitterGoogle +PinterestLinkedin Sylvia Shalhout Sylvia was the Content Marketing Manager at Mashvisor. As a real estate writer, she has been covering topics for the beginner and advanced real estate investor, helping them make smarter decisions as well as real estate agents looking to take their business to the next level. Related Posts Las Vegas Real Estate Market Returns to Normal Home prices up by 18.5% in December 2021, According to Corelogic The Impact of COVID-19 on Homeownership Rates Across the US Existing Home Sales Up 21% in June Amid COVID-19 Rent Prices Hit Record High Across the Country Airbnb Party Ban: The Crackdown Continues As Thousands of Suspicious Bookings Are Blocked Apartment Occupancy Rates Reach 20-Year High Los Angeles Housing Market Named the Least Affordable in the US The Best and Worst States to Get a Mortgage New Los Angeles Airbnb Laws Set for 2019 Study: Mortgage Rates Differ by State in the US Housing Market 5G Network Availability Becoming a Major Factor in Real Estate Sales, Verizon Survey Reveals Leave a Comment Cancel Reply Save my name, email, and website in this browser for the next time I comment.