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- The average amount withdrawn has already risen from 27% from late last year to $64K in recent months.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