When mortgage rates drop, the mantra is “no buyers left behind”

As mortgage rates continue to fall, Chad Earnest's mantra with his referral partners in 2023 is: "No buyer left behind".

The Montgomery, Texas, area manager who moved from thereAmeriSave Mortgage CorporationtoCardinal Financial Companyin November launched a platform in mid-2022 to help its referral partners succeed.

He makes co-marketing investments and helps partners with their databases by looking for missed opportunities in the marketplace. The main focus is on borrowers who may be credit-constrained.

"Home buyers are traditionally the byproduct of our referral partners like real estate agents and home builders," Earnest said. "We're looking for agents who understand the importance of generating leads, and working with them."

Earnest says the traditional referral game "is difficult right now, and we have to look under every rock for qualified homebuyers who are active in the market".

A buoy for Earnest's team effort: Mortgage rates are falling, bringing borrowers on the sidelines back to the market.

Lower mortgage rates

TheMortgage Bankers Association(MBA) reported Tuesday that the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances (726.200 USD or less) during the week to the 20. January has fallen to 6.20%, compared with 6.23% the previous week.

Meanwhile, MBA data show that interest rates on jumbo loans (more than 726.200 USD) have dropped from 6.08% to 5.92% in the same period.

AtMortgage News Daily, conforming rates for 30-year fixed mortgages were at 6.21% Wednesday morning, while jumbo loans were at 5.72%.

"Mortgage rates fell for the third week in a row, which is good news for potential homebuyers looking ahead to the spring home-buying season," Joel Kan, MBA vice president and deputy chief economist, said in a statement. "Mortgage rates for most loan types fell last week, with the 30-year fixed rate hitting its lowest level since September 2022."

More mortgage applications

Amid lower mortgage rates, applications for home loans rose in the week to 20, according to MBA. January down 7% from the previous week.

In terms of the various products on the market, refinance applications increased 15% from the previous week, but remained 77% behind last year's pace. Kan says interest rates remain more than two percentage points higher than a year ago, offering very little refinancing incentive for most borrowers tied to lower rates.

Purchase applications increased 3% from the previous week, but were 39% lower than the same week a year ago.

"Home buying activity remains tepid, but as interest rates continue to fall and home prices continue to cool, we expect potential buyers to re-enter the market. Many have been waiting for affordability challenges to ease," Kan said.

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