Mortgage-Refinance Boom Will Go Into 2013: US Bank CEO, Bancorp
"Mortgage-Refinance Boom Will Go Into 2013: Bank CEO
Published: Wednesday, 17 Oct 2012 | 5:45 PM ET
George Frey | Bloomberg
Homeowners will continue to refinance their mortgages well into next year and potentially beyond as interest rates remain near record lows, U.S. Bancorp CEO Richard Davis told CNBC’s “Closing Bell” on Wednesday.
With interest rates remaining lower for longer, homeowners will continue to refinance, Davis said.
“For us, that continues to be a very positive pipeline and I expect that to continue well into 2013 and just until the rates start to turn up, which could be well beyond that,” he said.
U.S. Bancorp’s third-quarter earnings were up 14 percent due to a surge in mortgage-refinancing activity.
In the quarter, two-thirds of mortgage activity was refinancing while the other third was for purchase. That’s actually a little better than it had been in past quarter, Davis said, as “people are starting to buy new homes.”
“But over the longer-term, rates will go up and refis will come down, and we’ll find other ways to make money for our shareholders,” Davis said.
A turn in interest rates should also help banks make more money, Davis noted, since current Federal Reserve policy has hurt the yield curve. “Banks start to do better when rates start moving north,” he said. "