Refinance requests have skyrocketed due to falling mortgage rates after voters in the United Kingdom voted to leave the European Union, according to data from Zillow.
The number of consumers seeking a refi loan on Zilliow increased 132% from activity the week prior to the Brexit vote, the Seattle-based company said Friday. Zillow noted that the average rate for the 30-year fixed-rate conforming mortgage had dropped 19 basis points since the Brexit vote to 3.27%, approaching 2012 lows.
Zillow also found that purchase requests have similarly increased in the wake of the Brexit vote. Purchase mortgage requests rose 24% following the referendum.
"Compared to everything else going on in the world, U.S. mortgage-backed securities now seem like a relatively safe bet for global investors, and this flight to safety has created savings opportunities for U.S. homeowners and those who want to buy," said Erin Lantz, Zillow's vice president of mortgages, in a news release.
"The drop in rates following the vote sparked an influx of refinance activity, and may also be encouraging home shoppers to move quickly and lock in a rate."
But Lantz cautioned that while the lower rates present an attractive savings opportunity for borrowers, they will not solve overall problems related to affordability.
"Affordability is rarely determined solely on the rate you can get," Lantz said. "The harsh reality is that if you couldn't afford a house a few weeks ago, you likely still can't."
