The number of borrowers who could reap the benefits of refinancing has grown to 7.1 million as interest rates have fallen, according to the Black Knight Financial Services Mortgage Monitor for February.
Year-over-year the number of potential refinance candidates has risen by 3 million, Black Knight said in an April 6 news release. In addition to falling interest rates, these borrowers have also benefited from increased equity due to home price inflation.
The Black Knight report found, however, that this rise in the number of borrowers who could seek refinancing might be fleeting. A 50-basis-point rise in interest rates alone would push 3 million borrowers out of contention for refinancing their mortgages.
Furthermore, prepayment speeds of borrowers with credit scores below 620 have fallen to the lowest level since Black Knight started tracking this data in 2000. The Jacksonville, Fla.-based company said this group's average loan age was 98 months, compared with 38 months and less for borrowers with credit scores of 750 and above.
Another indicator that saw a record low in February according to Black Knight was distressed real estate transactions, including short sales and REO, which reached their lowest level since 2007 last year.
The report also gave special focus to the state of Florida, which continues to struggle following the housing crisis. In 2014, the Sunshine State led the U.S. in distressed sales, with these making 25% of all real estate transactions in Florida and 26% of all distressed transactions nationwide. The national average for distressed transactions last year stood at12.7%.
