The increase in financing costs since
Borrowers with refinancing incentive, defined by a potential rate reduction of 0.75% or more, had dropped by 5 million from 14.9 million as of Oct. 28, Black Knight found in an analysis based in part on
While the short-term reduction in prospects may worry lenders, refi incentive is still historically strong.
“Prior to 2020 … the population had never reached above 10 million,” Black Knight said in its most recent monthly Mortgage Monitor report. Refinance incentive peaked at 19.4 million in mid-December 2020.
Average 30-year mortgage rates have risen 28 basis points from 2.86% to 3.14% since the Fed’s meeting in September, according to Freddie Mac. The Fed signaled at that meeting that it could begin tapering bond purchases used to put downward pressure on rates last year
Since the pandemic’s onset, 8.8 million borrowers have completed no-cash-out refinances and reduced mortgage payments by more than $1.3 billion per month, adding up to a total $14 billion in savings, Black Knight’s figures show.
“By the end of 2022, those borrowers will have realized nearly $35 billion in aggregate savings, with the potential for nearly $16 billion per year in continuing, ongoing economic stimulus,” the company said in its report.
Also in the past year, 5.5 million borrowers have withdrawn equity from their homes through cash-out refinancing. Cash-outs could remain a source of refinancing even as rates rise if home equity — which has been buoyed by
