Refinancing demand at 15-month high
TEXT OF STORY
BILL RADKE: You know, we’ve been passing on so much bad news the past few weeks, we should tell you there has been a glimmer of economic hope lately —
and we hear about it now from Marketplace’s John Dimsdale.
JOHN DIMSDALE: Mortgage rates are at record lows. That explains why demand for refinancings hit a 15-month high last week.
David Malpass at Encima Global says that helps homeowners.
DAVID MALPASS: That means their payments on a monthly basis will be lower and for a long time period of time. So it’s like they got a raise at work. So that’s very good news.
That extra cash will give the economy a boost, especially if homeowners spend it. Recently, Americans, worried about their jobs, have been saving a lot more.
But Morgan Stanley economist Ted Wieseman says maybe a lower house payment will get them to open up their pocketbooks.
TED WIESEMAN: We would think that given how high the savings rate has gotten now we’re probably getting pretty close to where people should start spending some more out of their income and meeting some of the pent-up demand that’s built up.
Even if they don’t spend it, homeowners could invest it, says Malpass.
MALPASS: Some of them will start a small business. They see that their payments are going to be less on their mortgage. And they can begin to invest in that business they’ve always dreamed about.
In Washington, I’m John Dimsdale for Marketplace.
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