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How Long Can 2019 Mortgage Refi Boom Last? – August Update

Julian Hebron

This post originally appeared on The Basis Point: How Long Can 2019 Mortgage Refi Boom Last? – August Update


Earlier this month, mortgage data masters Black Knight reported as many as 20 million people could refinance their home loans.

Their latest data from July 2019 shows us the scale of the 2019 refi boom and the health of the mortgage market at large. It also prompts the question—how much gas is left in the refi tank?

BLACK KNIGHT FIRST LOOK, 2019 REFI BOOM

– Mortgage delinquencies fell 7% in July (big decreases like this tend to happen when the previous month’s numbers are exaggerated by calendar tricks)

– Lowest mortgage delinquency rate for July in 19 years

– Loans 90+ days past due at lowest level since June 2006

– Refis jumped 26% up from June to July

– July 2019 refi activity up 60% from July 2018

HOW LONG CAN THE REFI TRAIN RUN?

To get an idea of how long the refi party can last, let’s look at some of the data the real estate and consumer finance industry is operating on.

Check out this data from the Mortgage Banker Association’s industry forecast.

I picked out some relevant information in red here. We’ve seen interest rates fall from 4.4% in Q1 2019 to around 3.7% this summer. That’s where $175 billion in refis come in.

By the numbers:

– $458 billion in refis in 2018

– Compare that to $633b now projected for 2019

– That trends back down to $456b in 2020 as interest rates normalize

These are just forecasts, not futures cast in stone. But industry experts don’t expect the 2019 refi boom to last forever.

So homeowners, you need to call your lender to see if you can save money. Rates change daily, and waiting for rates to go lower is gut wrenching.

As for you industry pros, enjoy the bounty while it lasts, but plan for the swing back to purchase. More on this shortly.

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