According to Diana Olick with CNBC, there are more than 5.9M homeowners who could see their rates drop by at least 75 basis points by refinancing their mortgages.
Black Knight, a mortgage software and analytics company, indicated to Olick that more than 2M people in just the last month could take advantage of refinancing in order to drop their rates. Just think of it…May 21 of this year had interest rates at 4.23% and now rates are 3.94%.
This 2M people represents the largest group of eligible candidates to benefit from refinancing in nearly 3 years. This 2M people also represents $1.6B in potential monthly savings to the tune of approximately $271/month.
Potential homebuyers could also benefit from these lower interest rates especially since home prices are in a “cooling off” mode. In March 2019, home price appreciation was up +3.8% annually, the “first time growth has fallen below its 24-year average of 3.9% since 2012,” according to Black Knight.
Due to interest rates, affordability is the “best its been in a year,” wrote Olick. Monthly payments on an average-priced home are down -6% (with a down payment of 20%) over the past six months.
According to Ben Graboske, president of Black Knight’s data and analytics division, “When we factor income into the equation, we see that it takes 22% of a median income to purchase the average-priced house, not the more usual 25% that may be difficult for buyers who may have excessive non-mortgage debt.”