Almost No Refinances
Refis are almost extinct! The jump in interest rates over the past year has really messed around with the mortgage industry. For many years, there has been a healthy mix of loan originations with home purchases and loan refinances. But with the big run up in interest rates since April 2022, the refinances have virtually dried up. Prior to then, most every homeowner with a mortgage found themselves in the 2.5% to 4% range. Those folks certainly aren’t refinancing now. And with the higher interest rates, fewer buyers are purchasing homes, so the number of new loans is also down. A double-whammy for the mortgage industry. In the greater Austin area, 95% of the loans in May were purchase loans and just 5% were refis. Even 5% seems high until you realize that includes someone taking cash out of their home and those who had a loan whose term ended so they needed a new loan.