Refi Boom 2.0

While rising rates have dissuaded many homeowners from refinancing, there are still million so homeowners who benefit from doing so, according to Black Knight’s latest mortgage monitor report…(Black Knight)

• Rising rates have cut the number of high-quality refinance candidates by 23% or 3.4 million.

• However, 11.5 million mortgage-holders with strong credit both likely qualify for a refi and it would cut their first lien rates by at least 75 basis points

Refis have pulled back by 40% from the peaks seen earlier this year, with further declines expected in coming months

• However, 2021 is on pace to to hit 8.9M refis which is just shy of the record 9M set in 2020

While rate/term lending is down 50% and is expected to continue falling the industry is wondering if there could be an increase of cash-out volume which is only 15% off its peak.

• More than 70% of the nation’s $9.1T in tappable equity is held by borrowers with credit scores of 760 or higher.

• The average amount withdrawn has already risen from 27% from late last year to $64K in recent months.

NOTE: Rising rates might not be a deterrent when it comes to cash-outs. In late 2018, more than 70% of cash-out borrowers accepted rate increases to access their equity.