Texas Mortgage Rates In 2021: What Changed?
By Space Coast Daily // March 9, 2021
Mortgage rates in Texas have been up and down like a yo-yo over the last couple of years and they do not appear to be changing too much in 2021 as of the moment.
Despite the financial crisis that much of the world finds itself in because of the Coronavirus pandemic, many have looked to take advantage of the mortgage rates that have been provided as they have become more accessible and affordable, especially for many in the State of Texas.
Decrease in demand
However, there has been a sudden decrease in demand for mortgage rates in Texas because of a number of external factors and some that might have made the state a little less desirable, despite it being one of the top locations for many in the country in regards to getting on the property ladder.
As recently as February 2021, higher mortgage rates and crippling winter weather have meant that the state has seen a decrease in demand and has seen it drop week on week, although the overall rate has increased from the month last year.
According to reports, the total mortgage application volume fell 11.4% compared to the previous week, whilst the average contract interest rate for a 30-year fixed-rate mortgage increased to 3.08% from 2.98%. In addition, points increased from 0.43 to 0.46 for loans with a 20% down payment, with the rate being up 65 basis points from the previous year.
Mortgage rates at their highest in Texas
Indeed, the 3.08% mortgage rate is the highest it has been in Texas since September 2020, which has also led to less refinancing activity in 2021, as well.
It is said that applications to refinance a home in 2021 are still over 50% higher than last year, but the trend has taken a sharp 11% fall over a period of a week. However, that should not come as a surprise as the refinance share of the mortgage activity has decreased to 68.5% of total applications from 69.3%.
Mortgage applications have continued to fall in the immediate moment, however they do remain up on last year, thus showing good and encouraging signs for 2021.
Other factors have caused issues
The problem is, that the higher mortgage rates have certainly proved to be a factor as to why there has been some changes in Texas, although that has only been coupled with the recent external factors that have hit the state hard.
For instance, the recent severe winter weather will have only impacted the market, whilst continued power outages in the southern state have continued to play a role, as well. After the power outages, it is thought that a drop of more than 40% in purchase and refinance applications to have been made.
Mortgage rates continue to push higher for the time being in 2021, which could potentially cut further refinance demands within the State of Texas. Rates are still incredibly low, but with fast-ricing prices, there is potential for a recipe of disaster.