The chart below from this item over at the WSJ economics blog the other day goes a long way in explaining why banks have been laying off so many workers in recent months.
With the sharp rise in long-term interest rates since about May, the 2013 refinancing boom is now about over and, despite rising home sales and home prices this year, there’s not been a big increase in the volume of mortgages since Wall Street investors (who don’t need mortgages) have been responsible for an unusually large share of home purchases.
What’s both funny and ironic to me when looking at the chart above is that, back when my wife and I had a mortgage, we were part of that 2003 refinancing boom. That was back when 30-year mortgage rates had just dropped to about 6 percent and the guy from the bank told me that I better lock in that rate because I’d probably never see it again in my lifetime.
Unfortunately, he may have been right … but for the wrong reason.