Record low mortgage rates mean money in people's pockets and money to spend on the holidays. One of the country's leading economist atUNCsays the ready cash should spark a whole new wave of buying this holiday season.
Many economists believe we are going to spend more than ever this holiday season, because millions of Americans are refinancing their homes, giving them lots of extra spending money.
"You know it used to be we bragged about some great stock or a new child or something, but now it's 'hey I refinanced at this rate,'" said UNC Economist Jim Smith.
Fannie Maeestimates seven million Americans will refinance their homes in 1998, more than tripling last year's figure and a third higher than the previous record.
Jo Sorbi refinanced her downtown Raleigh condo and has an extra $200 a month to spend.
"I'm able to not have to put things on credit, and I got everyone's presents that I really wanted to get them. It was nice to be able to have that freedom and a little bit of that leeway," said Sorbi
And there are numerous homeowners with even more extra cash to spend.
"On average they're getting about $200 a month, but that's $2,400 a year and that's great. You know high end people refinancing jumbos may be saving $1,000 dollars a month or more," said Smith.
All told, there should be about $7 billion worth of refinancings this year. And there will probably be a lot more next year, since interest rates may drop even further.
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