"Matt Vernon, the head of consumer lending at Bank of America, told HousingWire via email that recent rate declines have prompted increased activity in the refinance market through both rate-and-term and cash-out refi loans. Most people are focused on rate-and-term refinances to lower their monthly payments, while some are also looking to tap into their home equity, Vernon said. For example, HELOC rates dropped quickly after the Fed's recent cut."
"Bank of America expects another cut in December, plus 75 basis points of cuts through 2026. Buyers are noticing too our latest Homebuyer Insights report shows that 52% say the market feels better than last year, and 75% expect prices and rates to go down. Similar observations were noted in a forecast released Tuesday by Fannie Mae economists. They call for mortgage rates to end 2025 and 2026 at 6.4% and 5.9%, respectively, down from their prior estimates of 6.5% and 6.1%."
Recent interest-rate declines have increased refinance activity across rate-and-term and cash-out loans, with many borrowers prioritizing lower monthly payments while some access home equity. HELOC rates fell sharply after the Federal Reserve's recent cut. Starter homes have strengthened as first-time buyers and affordability-constrained borrowers gravitate toward lower-priced inventory; pending sales of starter homes rose 10.2% year-over-year in July, with starter-home price growth at 4.2%—the slowest among price tiers. Bank of America projects additional Fed cuts through 2026, many buyers expect prices and rates to fall, and Fannie Mae forecasts mortgage rates easing into 2025–2026.
Read at www.housingwire.com
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