Record low mortgage rates have spurred a flood of mortgage refinancings in North Texas and the U.S.
Have you refinanced your house yet?
Record low mortgage rates have fueled a surge in home refinancing as owners take advantage of the lower costs.
The same low mortgage rates have caused home sales to jump, too. But many more folks are staying put and refinancing instead.
Through the first half of 2020, almost 75,000 Dallas-Fort Worth residents have refinanced their homes, according to a survey by Attom Data Solutions. Refinancing in the most recent quarter is up by almost 160% from where it was a year ago to the highest volume in more than 15 years.
The number of homeowners who reset their loans was streets ahead of the less than 45,000 D-FW mortgages for home purchases in the first half of this year.
Nationwide, residential refinance mortgages made up almost two-thirds of home loan activity during the second quarter, according to Attom Data.
Almost 1.7 million Americans refinanced their property during the quarter ended in June — double the number of the previous year. The refinanced loans totaled an estimated $513 billion.
Home purchase loans accounted for less than 30% of nationwide mortgage volume.
“The second quarter of 2020 really was a tale of two markets for lenders,” Attom Data’s Todd Teta said in the new report. “One saw a continued flood of homeowners refinancing their loans at lower interest rates while the other saw a drop in home-purchase and home-equity borrowing as the economy sagged under virus-related lockdowns.
“How this plays out in the third quarter will depend on how many homeowners still want to roll over their loans and whether the economy recovers enough to boost home sales,” he said. “The lending market remains buoyed by cheap money but clouded by major uncertainty.”
The flood of home refinancing has saved North Texas homeowners millions of dollars in monthly payments and is a boost to the local economy.
Refinancing a $300,000 long-term home loan from 4% to current rates saves about $170 a month in payments.
The pace of home refinancing may slow during the remainder of the year.
The country’s two largest mortgage companies — government owned Fannie Mae and Freddie Mac — have announced that they will start charging an additional half percentage point for home refinancing starting next month.
That could significantly reduce the savings homeowners can get by redoing their loans.
This year’s sharp increase in home refinancing has taxed mortgage companies and home appraisers trying to keep up with the demand.
And the same low interest rates that have driven the refinancings led to a 25% year-over-year jump in home purchases in North Texas in July.