Refinancing, Mortgage Activity Sharply Decline

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... a double digit decline in mortgage applications ... this is going on ... the eternal on John were done in the newsroom at the Wall Street Journal and this is your money matters ... filming is says Mike Wright and Tony is the chief economist at the Mortgage Bankers Association ... mortgage applications drop some twelve percent over the last two weeks ... and refinancing also took a hit ... so Mike describe press one has been going on here and give this some of the deatails about the decline ... in bold mortgage applications and in refinancing typically at the end of the year might be a pretty sharp dropoff and mortgage application activity ... when the wind in the data and include adjustments or at the end of the year holidays but ... even after the judgment that you know that we saw a pretty sharp drop in tow application volume dropped twelve percent over the last two weeks of the year ... if you look at the breakdown of that ... refinance volume dropped twenty two percent over that two week period ... deprecation was was pretty much flat ... it in context of mortgage rates ... reaching their highest level in over two years were up to a ... high of four point four five percent ... in the week before Christmas and then dropped about four point three seven ... week after Christmas so this is more than just a holiday ... slowdown ... that's right yet even controlling for the typical owner with the Wiehoff ... a further decline in a cage on him now you mentioned were the thirty year fixed rate mortgage that is right now when you see it going ... in the year ahead ... do we do expect the rate for an increase for the for the remainder of twenty seventeen ... the key rate ... really being in a range of four to five percent through the year ... probably end in the year at about four point seven percent could not have much higher ... but can we expect that ... when economic it is coming in strong when markets are more confident about the environment ... the great to go into much higher ... when you get some bad news when IP rate dipping back closer to four percent ... O Lord and of the range but ... I think overall ... trending up prior to the course of the year and close to five percent to four percent ... and with the refinance index dropping some twenty two percent from two weeks ago ... what impact do you think that was hands on ... the do it yourself retailers and other things out there people traditionally take ... money now when they go to refinance maybe they even buy a second property or ... I've known people even use the money to buy a car or something like that so ... talk about the economic implications that the great question on ... your right in that in the pre crisis period ... many people live ... cash out refinance is where they would take time to ... take equity out of their properties and use that for other spending ... we've seen the percentage every time and to better cash out begin to increase ... our vacation at that ... level to remain pretty low compared to where we were pre crisis and the reason is that ... you have so many borrowers now with just extremely low rate ... on their first mortgage with ... him pre nap percent are or lower in companies that are going to be reluctant ... to refinance that first ... in May turned to a home equity line of credit over horrific tend to get more used to or ... even a personal loan or credit card debt rather than the cash out refinance ... does this mean the housing market could be cooling ... that the purchase application volume was with freshly plowed over the past couple weeks then ... we continue to be trending I relative to where were last year ... at this point in and mostly beginning to the fuel continued growth ... in home sales both revenue and the King died ... and home prices are still growing ... into the of inflation so I think ... all the time showing that ... the housing market to continue that to ... be in relatively good health ... that supported by very strong job market and we can have an unemployment rate to four point six percent ... I think that being ... gravity hundred mm eighty thousand new jobs in the December job report Friday ... and with that beginning to think of Winchell okok that's really the more important factor for the housing market and ... a slight ... uptick in rates would seem to carve out ... the increasing rate he is ... really Beery a very large may get a refinance portion of the market were talking about the housing market and mortgages SAN your list and your money matters from the Wall Street Journal ... thanks for listening everyone so like where do you see interest rates going this year and I ask because the Federal Reserve ... has already hiked rates ... and now there's talk about how many more times could Janet Yellen Company ... hike rates in twenty seventeen what's your forecasts ... she had a high for the second time cause greater than the sambar ... we expect there to hike three times in twenty seventeen ... and probably an equal amount in twenty eighteen and nineteen ... up until the Fed funds target to post about three percent from a half percent reduction to a ... given the rapid rate than the overall ... for a more robust picture were staying in the economy actually think there's ... a chance they could go more than three times ... in twenty seventeen ... so do you think the economy The U S economy is actually strong enough to ... withstand three rate hikes or even more ... thing though you add a level of a half percent it is still providing ... in the word that the Fed ... really ... suitable accommodation for the economy ... the analogy is ... not that there's living on the brink ... on the car but Beery gently taken their foot off the accelerator ... I think that's the way to think about it ... aam there may come a time to three years down the road they're going have to really clear on the brink of inflation ... begin to color it but at this point to gently heating their foot off the car or ease my stress and Tony he's the chief economist at the Mortgage Bankers Association ... Mike thanks for your time ... I feel ... like joining us from Washington to munch on were gone and this has been your money matters from the Wall Street Journal