Could the inclination on interest rates be related to different age groups?
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For the second month in a row, April saw mortgage rates decrease after four months of consecutive increases, according to the National Association of Home Builders.
Contract rates for mortgages on newly-built, single-family homes fell by 10 basis points to 4.02% but are still higher than the October 2016 low rate of 3.54%.
Recent analysis of the fluctuation of mortgage rates connects the aging population to putting a “downward pressure on real interest rates.”
An article from the Federal Reserve Bank of Atlanta noted a recent research that suggests younger people feel more strongly towards interest rate changes than older people.
“Younger people generally carry larger mortgages because older people have typically had more years to pay down their home loans ... Because they owe more money, younger people have more reason to refinance their mortgages when interest rates drop. And among those who refinance when rates fall, consumption rises much more than among those who don't refinance…”
This idea is evident with a study by researchers at the Federal Reserve Bank of New York. They found out that borrowers with mortgage “above 60 years of age nearly doubled between 2006 and 2016, from 15% to 27% while the proportion of mortgaged homeowners under 45 fell from 42% percent to 31%.”
Related stories:
Mortgage applications slide
Millennials and roadblocks to homeownership
Contract rates for mortgages on newly-built, single-family homes fell by 10 basis points to 4.02% but are still higher than the October 2016 low rate of 3.54%.
Recent analysis of the fluctuation of mortgage rates connects the aging population to putting a “downward pressure on real interest rates.”
An article from the Federal Reserve Bank of Atlanta noted a recent research that suggests younger people feel more strongly towards interest rate changes than older people.
“Younger people generally carry larger mortgages because older people have typically had more years to pay down their home loans ... Because they owe more money, younger people have more reason to refinance their mortgages when interest rates drop. And among those who refinance when rates fall, consumption rises much more than among those who don't refinance…”
This idea is evident with a study by researchers at the Federal Reserve Bank of New York. They found out that borrowers with mortgage “above 60 years of age nearly doubled between 2006 and 2016, from 15% to 27% while the proportion of mortgaged homeowners under 45 fell from 42% percent to 31%.”
Related stories:
Mortgage applications slide
Millennials and roadblocks to homeownership
