- In Q2 2020, refinancings hit record $1.12T
- Black Knight indicated there +19M high-quality refinance candidates, some 43% of all 30-year mortgages
- Q3 2020 could well eclipse record-setting Q2 refinancings
Due to record low interest rates, the mortgage refinance market has never seen such action. That action drove a record $1.1T in refinancings in Q2 2020.
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Can such refinancing action continue? Black Knight said yes. In fact, in this data and analytics firm’s most recent report, Black Knight indicated there are some19.3M high-quality refinance candidates with credit scores of 720 or higher who hold at least 20% equity in their homes, are current on their monthly mortgage payments and could reduce at least 0.75% of their first loan rate by refinancing.
If all of these +19M qualifying candidates chose to refinance their first rate lien, the average savings would be $299/month, an aggregate of $5.3B. Knight Frank indicated that +7M of these high qualifying candidates could save at least $300/month and 2.5M candidates could save $500/month or more.
Andy Walden, director of market research at Black Knight, said, “Even with everything going on in the broader economy, we’re still seeing record levels of refinancings out there, simply because rates are sitting at 2.86%.”
Industry experts are expecting Q3 2020 refinancings to increase +20% and exceed Q2’s record refi volume. Will Pendleton, senior managing director of third party originations at Home Point Finance, said, “We feel that the low-rate environment is likely to persist well into 2021.”
Stan Middleman, CEO of Freedom Mortgage, agreed. “I think it’s going to be busy well into next year, if not longer. The protracted level of interest rates being low would seem to indicate that it will be a while until the refis play out. One of the reasons it was only $1.1T last quarter was that the industry was not built out to the appropriate capacity necessary.”
No wonder the country’s largest mortgage company, Rocket Companies, parent of QuickenLoans, just went public.
Thanks to HousingWire.
Also read: Q2 Sees Equity Levels Improve Nationwide, Home Sales Seen as Only Bright Spot in Economy, Highest Rate of Mortgage Delinquencies Since November 2011